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INDUSTRY REPORT

One Year Later: AI Underwriting & Portfolio Performance Through COVID

How consumer loans originated before the pandemic performed through a year of economic uncertainty

One Year Later

Key takeaways

1

At the peak of the crisis, impairment across the Upstart platform increased 40% less than the industry as a whole

2

Fewer borrowers on the Upstart platform required a hardship program, and more of these borrowers began promptly making on-time payments

3

The Upstart Risk Tier, assigned by our model at origination, was 6 times more effective than credit score bands at separating the risk of payment impairment

4

The ability for Upstart's AI model to separate risk tiers translated into significantly lower payment impairment rates for our bank partners

Notable quotes

upstart-quoteWhile 80% of Americans have never defaulted on a credit obligation, fewer than half have the prime credit profile needed to qualify for a loan with a traditional bank.”

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upstart-quoteDuring the pandemic in 2020, the industry average rate of impairment increased a full 10 percentage points to nearly 16% at its peak in May 2020.”

upstart-quoteWe believe that these results will embolden leadership within the credit industry to push forward into a new era of AI-enabled lending.”

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