Compare Apple Card vs X1 Visa card by Thrive based on income & soft pull instead of credit score

[4sallypat]

With the Apple Card that recently changed the rules about credit cards (soft pull offers, income based credit line, and other non traditional credit card scoring models) - what do you think about a card that is being offered which goes solely on income and future income with a soft pull ?

With the pandemic that has hurt many people's traditional credit score, this company seems to bet on your future instead of the past.

Thrive has started up a credit card business called the X1 Card and it says:
".....setting limits based on your current and future income instead of your credit score.

The company says some customers can expect limits up to five times higher than what they would get from a traditional credit card. And that limit can move up if you get a promotion at your job, for instance."

“The consumer credit card industry has been almost untouched by tech and has relied on the archaic credit score system. Max [Levchin], David [Sacks] and I have similar scores — that makes no sense!” co-founder Deepak Rao told me. “We reimagined the credit card from the ground up to have smarter limits, intelligent features, modern rewards and a new look.”

Since this card can be used for Apple Pay and Google Pay - I figured I'd give it a shot since I have the Apple Card which I use daily....

I might be waiting for the X1 card since the wait list grew to 78,150 within the first day of announcement.

 

[Dancin-Ted-Danson]

A lot of players try to reinvent the credit card game... the ones that go outside of the current credit model are no longer around...

FICO works for a reason, and not because it's "archaic". It works because it's an accurate predictor of default rate, and that is what does almost every issuer who thinks they are changing the industry in. You can lend based on whatever you want, but the minute people stop paying it's game over. I'd be interested to see how they are validating the income of the people they extend credit to, and the requirements around that

 

[Erehy Dobon]

It's worth pointing out that the three credit agencies' methodology over the years has evolved. They're confidential and proprietary yet they have adjusted with the times.

Same with the FICO score which has also evolved over the years and likewise confidential and proprietary.

Remember that a credit score is just one part of a person's overall financial profile.

For sure you will never see the details of how a company like Thrive validates and approves their applicants.

One probable thing is that Thrive doesn't want to pay Fair Isaacs' fee. So they acquire the three credit agency scores separately and do their own non-FICO FICO-like score and add other criteria (income, assets, debt, age/sex/race, education, ZIP code, etc.).