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Upstart Is Growing Like a Weed. Here's Why Caution Is Still Needed

By Brian Stoffel and Brian Feroldi - Jun 28, 2021 at 8:00AM

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There's a much larger frenemy hiding in the background.

Upstart Holdings (UPST -4.83%) has a story anyone can get behind. It helps banks widen the circle of potential lenders by giving a better look at credit-worthiness. By taking different variables into account than FICO (FICO -0.20%), people who are normally walled off from lending gain access.

But it doesn't stop there: The company's default rates are lower than traditional models, and so are its interest rates. It's a win for banks, a win for borrowers, and a win for Upstart. That's hard to come by in the finance industry

There are, however, a few key risks that warrant attention from investors. In this June 24 video from their YouTube channel, Motley Fool contributors Brian Stoffel and Brian Feroldi take all they learned from an hour-long deep dive into Upstart and condense it to five minutes to provide you what you need to know about the company.

Brian Feroldi has no position in any of the stocks mentioned. Brian Stoffel has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Upstart Holdings, Inc. The Motley Fool recommends Fair Isaac. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Upstart Holdings, Inc. Stock Quote
Upstart Holdings, Inc.
$33.08 (-4.83%) $-1.68
Fair Isaac Corporation Stock Quote
Fair Isaac Corporation
$489.79 (-0.20%) $0.96

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