It is the first time such a service has been made available to blockchain networks.
On April 20th, a credit reporting agency in the United States, TransUnion, announced that it is starting to provide credit scoring to public blockchain networks.
According to the announcement, this new service will provide credit information to decentralized applications (dApps) upon the consumer's request. Consumers will receive their full credit information, while dApp will obtain a summary.
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It is worth noting that a service of this kind for a long time was unavailable to Web3 and decentralized finance (DeFi) applications.
To supply credit data through a digital passport network, TransUnion collaborated with Spring Labs and Quadrata. This partnership will ensure the protection of consumers' identities on the blockchain.
Although the project was initially announced over a year ago, it took some time to launch.
TransUnion's Executive Vice President of Financial Services, Jason Laky, stated that the new product aims to reduce lenders' risk and offer borrowers better opportunities for improved terms.
Credit scoring is an important tool for lenders to help mitigate risk regardless of the platform being used. This partnership <...> will allow for DeFi lenders to have access to this critical information when making their lending decisions with confidence, ultimately minimizing their risk and providing borrowers more opportunity for better terms.
TransUnion claims it can provide credit scoring for almost the entire US adult population and operates in more than 30 countries.
Spring Labs' chief executive officer (CEO), John Sun, noted that it is crucial to "assess risk and the privacy and anonymity expected by users of" the blockchain technology as more individuals are entering the space to "conduct business." Moreover, Sun stated:
This new product featuring TransUnion’s identity and credit data at its core is a big step toward achieving that balance and allowing more lending opportunities on the blockchain while minimizing risk.
TransUnion's move to provide identity-protected credit scoring for DeFi lending marks a significant development in the DeFi sector and addresses the longstanding challenge of credit scoring.
