Let me give you the real picture on what's happening right now in lending.
An estimated 40% of Americans — that's over 130 million people — are either credit invisible, subprime, or sit in a gray zone where traditional FICO-based underwriting says "no" automatically. They pay rent on time. They pay utilities. They pay their phone bill every month. But because those payments don't show up in the classic credit model, the banking system treats them like they don't exist.
That's the problem Propel Holdings is publicly calling out — and they're putting money on AI to fix it.
Propel Holdings — a publicly traded specialty finance company — made a bold public statement this month: FICO should be replaced by AI-driven underwriting models for the underserved segment of the population. Their argument is that behavioral data and alternative signals outperform FICO on default prediction for thin-file and subprime borrowers. In other words, the old system isn't just unfair — it's less accurate for the people it excludes.
This isn't just fintech talk. JPMorgan Chase and Goldman Sachs have both announced deep deployments of AI underwriting systems in 2026. JPMorgan's AI is processing loan applications using cash flow patterns, account behavior, and transaction history — not just credit scores. Goldman's Marcus division has been piloting similar models. They're not waiting for FICO to change. They're building around it.
The scoring war we covered last week connects directly here. VantageScore 4.0 — now accepted for Fannie/Freddie mortgage underwriting — already incorporates rent, utility, and telecom payment history. It scores people FICO ignores. The AI lending push is the next step in the same direction: lenders are actively competing to serve the "unscorable" because that's where the untapped market is.
Here's the part that matters most to you right now: none of this is live for everyone yet.
AI underwriting is rolling out through specific lenders, specific products, and specific loan types. When you apply for a personal loan at your local bank or credit union today, they're almost certainly still pulling your classic FICO. The AI models are live at certain fintechs, neobanks, and the big institutions' direct-to-consumer products — but it's patchy. You can't just assume your alternative payment history counts everywhere.
What this means practically: you can't skip building your credit file and just hope AI lending reaches you in time for whatever you need. You need both. You want your FICO cleaned up and climbing for the lenders still using it, AND you want your alternative payment history documented and on the record for the AI-based systems that are coming.
AI underwriting can also hurt you in ways FICO doesn't. A behavioral model sees everything — irregular income, overdrafts, spending patterns that suggest financial stress. If you have a messy bank account history even with a solid payment record, some AI models will flag that. The same technology that could approve people FICO ignores could also decline people FICO would approve. You need to understand which model the lender is using before you apply.
NMD Solutions built tools specifically for this transition. Whether you need to clean up your FICO for traditional lenders still running the old model, or position yourself for AI-based systems that read your full financial profile — the strategy changes depending on which door you're walking through. The ScoreBoost Credit Bot walks you through both paths and gives you a real answer on where you stand.
The 40% stat is not abstract. If you've been turned down for a loan, a credit card, or a mortgage because of your score — you're in that number. Banks have been saying "no" to over 100 million Americans not because those people are financially irresponsible, but because the scoring model was built in 1989 and never designed for the modern economy.
That's changing. But changing slow. And until AI underwriting is genuinely universal, your FICO score is still the key that opens most doors. Don't stop building.
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The NMD ScoreBoost Bot walks you through your full credit situation — disputes, strategy, and a real action plan based on your actual file. Free to start, no gatekeeping.