January 13, 2016
Social Finance Inc., a San Francisco company, has decided to do away with FICO scores in its student loan refinancing, mortgage and personal loan offerings decisions.
The platform had been running a pilot non-FICO lending scheme that began in the fall of 2015, announcing that the pilot operation will now become the norm. The platform will henceforth consider three criteria—employment history, the track record of meeting financial obligations, and monthly cash flow minus expenses—to determine if an applicant is qualified for its loan products, which include student loan refinancing, mortgages and personal loans.
Banishing traditional credit scores stems from SoFi's belief that the FICO model is flawed and outdated; it's less of an indicator of how a borrower wil ...