Startups Assess Loans With Algorithms Rather Than FICO Scores
This article is for subscribers only.
For more than 40 years, banks have counted on FICO scores to determine the credit worthiness of American consumers. Now a handful of entrepreneurs in California say it’s time for a smarter way to size up borrowers.
Los Angeles-based ZestCash Inc., along with San Francisco startups BillFloat Inc. and LendingClub Corp., are hiring computer programmers to write software that can better identify candidates for loans -- including people with low credit scores. The companies, backed by venture money, also aim to provide lower fees and interest rates than banks.