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

Upstart Holdings (NASDAQ:UPST) 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 (NYSE:FICO), 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.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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