馃攳
Upstart Loan to Replace FICO Score - YouTube
Channel: Tomy - Everyday Finance
[0]
- What's up guys, Tomy
here with Everyday Finance.
[2]
And in this video, I'm
going to be talking about
[3]
the Upstart lending platform,
and how they're planning
[6]
on trying to replace
the FICO credit score.
[9]
So if that's something that interests you,
[10]
be sure you stay tuned.
[12]
So I don't intend to take
too long with this video,
[14]
just to jump straight into it.
[15]
If you haven't heard about
the Upstart lending platform,
[18]
basically the way that
platform works is they want
[20]
to kind of build out what
is sorta like a marketplace.
[24]
Their idea is that they want
to be able to create a place
[28]
where you can input your
information and then they
[30]
can present you the best
possible loan for whatever
[33]
your needs are.
[35]
Right now they're mainly
focused on personal loans,
[37]
but they started getting into auto loans
[40]
and I think they want to
venture into student loans
[42]
within the next year or so now.
[44]
In this video, I'm going
to be focusing strictly
[46]
on personal loans, because
I think that's our longest
[49]
selling product, and I think
that's a product that is going
[52]
to have the most benefit,
especially with what I'm going
[54]
to talk about here in a bit.
[55]
Now, these personal loans kind
of go from a thousand dollars
[59]
all the way up to $50,000.
[61]
And that's going to depend on
multiple different factors,
[63]
as well as what your state laws are.
[65]
The benefits of the
Upstart lending platform.
[68]
One thing that I found that
was crazy is they actually
[70]
use about a thousand different data points
[73]
to be able to find a loan
that'll work best for you.
[77]
So they don't just look at a credit score.
[80]
Now what their plan is, and
kind of what I'm looking at,
[83]
and they've gone public, you can see a lot
[84]
of this information in
their SEC filings as well,
[88]
but I think what they're
going to end up doing
[90]
is they're going to keep
collecting different data
[93]
and make sure that their
algorithm is working well.
[96]
And once they see that
they're actually able
[98]
to do a great job of
assigning loans to people
[103]
at different rates and different
terms and things like that,
[106]
then they're eventually going
to phase out the FICO score,
[108]
and they're not even gonna ask you
[111]
or pull your FICO score at all.
[112]
To me, what I like about
them is they actually are one
[115]
of the quickest out there.
[117]
They say that 99% of the loans are funded
[119]
within one business day, so
that means if you were to apply
[122]
for a loan today, and
before 5:00 PM Eastern time,
[126]
you accepted that loan,
then you're going to be able
[129]
to get it the following business day.
[132]
Now they don't do any hard
credit pulls to actually check
[136]
your options, it's a soft pull.
[138]
So that's why I typically
recommend people,
[141]
especially if you're in a
situation, I'm going to talk here
[144]
in a little bit what the loan is best for,
[145]
but if you're in one of those situations,
[147]
then go ahead and just do a
soft credit pull to get an idea
[149]
of what your options are.
[150]
That doesn't affect your credit at all.
[152]
And you're able to know if it's
actually a good fit for you.
[156]
Another great thing is
most of their borrowers
[159]
are automated, so basically
most of the loan applications
[162]
are completely automated.
[164]
Literally ended up getting
instantly approved.
[166]
Now the entire application is online.
[169]
The only time that it's
not automated, that 30%,
[171]
or roughly 30%, is whenever
additional information
[175]
is needed.
[176]
Maybe they need to check your identity,
[178]
whatever it could be.
[179]
And that's whenever someone
is going to reach out to you
[181]
and ask you to send an
additional information,
[183]
but for 70% of people, it's
going to be all done online
[186]
it's pretty much the
entire process automated,
[190]
so you can get approved with
a pretty much immediately,
[193]
almost instantaneously.
[194]
So the platform works pretty
simply, you apply on the site,
[197]
it takes about five minutes,
you get a soft credit pull,
[200]
and you will receive an
offer for typically three
[204]
to five year loan terms when
it comes to the personal loan.
[208]
And offers presented by the partner banks.
[211]
So again, Upstart is just
a platform, and that's what
[214]
I think is so great about them.
[216]
And also at this moment, right
now, I'm working on trying
[218]
to talk to them about
working through a partnership
[220]
because it's something
that I want to even provide
[223]
to a lot of my clients
whenever they're in a situation
[226]
where it best fits them.
[227]
Because it's essentially
a platform, a marketplace
[229]
where you're going to see a
lot of banks are going to have
[232]
to compete against each
other to get these customers.
[234]
And I think that's what's
going to drive even more
[236]
attractive rates whenever
it comes to personal loans.
[239]
These are pretty much best
for, I really look at three
[242]
scenarios is what I've found.
[243]
The best one is credit
card debt consolidation.
[247]
And the reason why I say that
is because typically that's
[250]
what's bringing down a
lot of people's scores.
[252]
30% of your score is
your credit utilization.
[255]
Now, if you're able to get a personal loan
[257]
and use that loan to completely
pay off your credit cards,
[260]
then you're going to see that
you're going to see a huge
[262]
jump in your credit score, right?
[263]
Your score is going to just
going to drastically jump up,
[266]
and it puts you in a better situation.
[267]
Especially if you're, let's
say that you're looking
[269]
to get into a mortgage
or you want to eventually
[272]
buy a house, this is going to
be a route that you might want
[275]
to take depending on what all
other factors you have at play
[278]
with your credit profile.
[281]
So that's one of the best
options that I typically see.
[283]
There's also just regular
debt consolidation.
[285]
So any types of debts, not
just a credit card debt.
[288]
So really you want to look at
high interest type of debts,
[290]
If you have any type of payday
loans or cash advance loans,
[295]
things like that, that might
be a route that you want to go.
[297]
Another option is medical expenses.
[300]
Those can be something that
you also use a personal loan
[303]
for, especially if you
get into that point where
[306]
they're about to send
it off to collections
[308]
and you're not sure how
to go about paying it.
[310]
It might work out for you
to get a personal loan.
[314]
Now, when it comes to the
requirements, first off,
[317]
in most states, you're going
to have to have a credit score
[319]
of at minimum 580.
[321]
So they want to see a 580 in most cases.
[324]
You can not have any
bankruptcies or public records
[327]
on your credit report.
[328]
And also they don't want you
to see that you're reporting
[331]
any accounts that are
currently delinquent.
[333]
So basically you want to mention
that you make sure all your
[336]
accounts are current
before you actually apply
[338]
for that loan.
[341]
I typically recommend you
get your accounts current
[343]
and give it 30 more days.
[345]
It might be better suited for
you to even pull your credit
[348]
report yourself, to kind of
make sure that it looks all
[350]
on the up and up, make sure
that everything's showing up
[353]
current, and then you can
apply it, so that's the route
[357]
that I typically recommend.
[358]
Now guys, honestly, I want
to say that this is something
[362]
that I wanted to just touch
on because I think that,
[365]
the way they're going, it
looks like they're going
[368]
to want to, they're going
to start using other factors
[370]
to be able to, they're
already using other factors,
[374]
but they're going to really
hone in on those other factors
[376]
to be able to decide who gets
approved and who doesn't,
[378]
and even more so, what kind
of a rate you're getting.
[382]
A lot of times, for those
of you guys who have
[384]
experienced it, a lot of
times if you have a bad credit
[386]
score, you're already
screwed from the beginning.
[388]
You're going to get a
higher interest rate.
[390]
You might not even get
approved for the loan
[391]
you're trying to get.
[393]
So they're trying to essentially
democratize that system
[397]
so that you're able to
not only get approved,
[400]
but get a great rate
because, sure, you might have
[403]
a bad credit score, but you
have all these other factors
[406]
in your financial profile
that are looking really good.
[409]
You have a great pay.
[411]
You pay your debts and everything on time.
[413]
You shouldn't get penalized
for a mistake that you made
[416]
five years ago, especially if
that's like the only mistake
[419]
you have, right, things like that.
[421]
So I think this is a great program.
[422]
You can check them out down below.
[424]
Again, I'm currently working
on them, hopefully I want to do
[427]
a partnership with these guys
and then maybe I'll shoot
[429]
other videos on them because
I think this platform
[431]
is going to be something
that's really game-changing.
[434]
I was even seeing a report
that was saying that even the
[437]
FTCs kind of released a no
action letter to these guys,
[441]
essentially saying that they
see how much of an impact
[445]
this can have on society so
they don't want to tamper down,
[449]
cause they're doing
something different, right?
[452]
The kind of artificial
intelligence type of stuff
[455]
that they're doing right
now with the thousand plus
[457]
data points is something different.
[458]
And the FTC doesn't want to
step in and try to hamper them
[461]
when there's something that's
helping society so much.
[466]
So definitely I recommend
you guys check it out,
[468]
especially if you're one of
those situations I mentioned,
[471]
check it out, maybe even
have your credit pulled,
[474]
do a soft credit pull and
see what kind of rates
[477]
that you're getting.
[477]
If you're getting better
rates than you would
[479]
with the credit card that
you have, it might make sense
[481]
for you to get that loan and
use it to pay off the credit
[484]
cards and put yourself
in a better situation.
[487]
It all depends on what
your specific situation is.
[490]
So that's gonna be the
gist of this video, guys.
[491]
I hope that helped you guys
get a little idea of what's
[494]
going on in the marketplace
and how everything's changing
[496]
in a financial space.
[498]
I hope you appreciated that video.
[499]
Make sure you throw a thumbs
up if this video brought you
[502]
any value, and hit the
subscribe button down below.
[506]
Alrighty.
[506]
So that's gonna be it for this video guys,
[507]
I appreciate y'all
watching and I'll see you
[509]
at the next one, peace.
Most Recent Videos:
You can go back to the homepage right here: Homepage