Upstart Says Originations Leap as Consumer Credit Strength Improves

Artificial intelligence (AI) lending marketplace Upstart saw growing consumer demand and steady consumer credit strength in the third quarter, executives said Tuesday (Nov. 4) during an earnings call.

The company’s originations rose 80% year over year in the third quarter to reach $2.9 billion, according to a presentation released in conjunction with the call.

By category, compared to the third quarter of 2024, personal loan originations were up 73% to $2.7 billion, auto originations were up fivefold to $128 million, and home originations were up fourfold to $72 million, per the presentation.

“Consumer demand for Upstart continued to grow rapidly, with more than 2 million applications submitted in Q3 — up over 30% from Q2 and reaching the highest level in more than three years,” Upstart Co-Founder and CEO Dave Girouard said during the call.

In terms of consumer credit strength, Girouard said Upstart’s macro indicator “ticked up modestly” in July and August, causing the company’s risk models to moderately reduce approvals and increase interest rates, but then reverted to a lower number.

Girouard characterized that movement as “nothing more than a speedbump.”

“To be clear, we see no material deterioration in consumer credit strength and in fact have seen recent signs of improvement,” Girouard said.

Looking ahead, Upstart expects its macro indicator, the Upstart Macro Index (UMI), to remain stable during the current quarter, Upstart Chief Financial Officer Sanjay Datta said during the call.

“As we look to Q4, the broader economic backdrop for credit remains favorable in our estimation,” Datta said. “Decelerating personal consumption growth is a signal of improving credit health, if perhaps counterintuitively so. Against this, we perceive a labor market that has remained at full employment since lockdown, meaning there are as many open jobs as job seekers in the economy, as well as a muted impact of the recent tariff policies on inflation, and a gradual easing of the monetary climate.”

Ninety-one percent of the loans enabled by Upstart during the third quarter were fully automated, requiring no human intervention from the company, according to the presentation.

Upstart enabled full automation of the home equity line of credit (HELOC) approval process in June. The company then increased automated lien and property verification rates via expanded data inputs throughout the third quarter, per the presentation.

At the time of the launch in June, Upstart automatically approved less than 1% of home loans. However, the company boosted that figure to 10% in September and 20% in October, Upstart Co-Founder and Chief Technology Officer Paul Gu said during the call.

“Our rapid pace of process improvements makes me optimistic that we’re on a path to an industry-leading home equity product,” Gu said.