The American credit reporting agency is teaming up with Spring Labs and Quadrata for a new service that should make DeFi borrowing easier and less risky.
TransUnion, one of the three major United States credit reporting agencies, announced April 20 that it would begin supplying credit scoring to public blockchain networks. Off-chain credit data have not previously been available to Web3 and decentralized finance (DeFi) applications.
In the new TransUnion service, credit information will be made available to decentralized applications, or Dapps, at the consumer’s request. Complete credit information will be delivered to the consumer, and excerpts will go to the Dapp.
TransUnion partnered with Spring Labs and Quadrata to provide credit data through a digital passport network that will protect the consumer’s identity on the blockchain. The project apparently took some time to get off the ground, as it was first announced over a year ago.
TransUnion executive vice president of financial services Jason Laky said the new product will help minimize lenders’ risk while “providing borrowers more opportunity for better terms.” TransUnion claimed it “can offer credit scoring for nearly the entire U.S. adult population” and has operating associates in more than 30 countries.
$TRU TransUnion, Spring Labs and Quadrata Partner to Deliver Credit Scoring to Blockchainhttps://t.co/StRYgos1qe
— Stock News Bot (@StockNewsBot2) April 20, 2023
Credit scoring has long been a sore spot for DeFi. TransUnion competitor Experian announced at the beginning of 2023 that it was partnering with Bulgarian DeFi lending platform Credefi. That deal gave Credefi “the rights to use Experian’s officially recognized and reputable brand materials.” Experian will participate in European Green Company scoring through the deal. In October, Equifax, the other major TransUnion competitor, said it was partnering with the Oasis blockchain to provide Know Your Customer services.
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Masa Finance recently launched an identity protocol based on soulbound tokens that also accommodated on-chain credit information. Pngme, which, like Masa Finance, was founded by Brendan Playford, helped create scores for “credit invisible” people in Africa based on mobile money data.
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