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TransUnion Offers Credit Scores for DeFi Borrowers Utilizing Crypto Assets

Blockworks | Shalini Nagarajan | Apr 21, 2023

Credit score - TransUnion Offers Credit Scores for DeFi Borrowers Utilizing Crypto Assets

TransUnion’s new crypto-focused service will provide individuals’ credit scores to blockchain dapps when they apply for DeFi loans. Their scores will be based on their real-world credit histories.

  • Blockchain data platform Spring Labs and Web3 identity solution provider Quadrata partnered with TransUnion on the initiative. In 2021, TransUnion led a $30 million investment in Spring Labs’ Series B.
    • Credit scores in Web3 aren’t a new concept. Quadrata previously partnered with nine DeFi protocols including TrueFi and Cred Protocol to provide KYC and anti-money laundering risk scores.

See:  Vitalik Proposes Web3 Credentials of the Future: ‘Soulbound Tokens’

  • TransUnion, headquartered in Chicago, enables consumers to obtain their credit data and selectively share it with relevant dapps, ensuring user privacy. This partnership empowers DeFi lenders with crucial information for confident lending decisions, reducing risk and offering borrowers better terms.
  • TransUnion's entry into the crypto space strengthens the case for DeFi, especially after the turmoil caused by the Terra collapse and subsequent market sell-offs. The transparent nature of DeFi addresses concerns over unsecured loans that have jeopardized lenders' balance sheets. The integration of TransUnion's identity and credit data into blockchain-based lending enables a balance between risk assessment and user privacy, promoting more lending opportunities while minimizing risk.

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