Borrowing Crypto With DeFi? TransUnion Shares Real-world Credit Scores

TransUnion is paying close attention to the crypto ecosystem, now connecting DeFi protocols with real-world credit scores

article-image

JHVEPhoto/Shutterstock, modified by Blockworks

share

Crypto users can soon provide their credit scores when making blockchain-based credit applications via major US credit bureau TransUnion.

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 credit histories.

“Credit scoring is an important tool for lenders to help mitigate risk regardless of the platform being used,” Jason Laky, TransUnion’s executive vice president of financial services, said in a statement

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.

Consumers can request their credit data from Chicago-headquartered TransUnion, which they will then choose to share with the relevant dapp. TransUnion says user privacy will be preserved in the process.

The partnership will allow DeFi lenders to access “critical information when making their lending decisions with confidence, ultimately minimizing their risk, and providing borrowers more opportunity for better terms,” Laky added.

TransUnion crypto push strengthens case for DeFi

TransUnion’s crypto move comes after one of worst sell-offs in history following the collapse of algorithmic stablecoin ecosystem Terra last year.

Roiled markets exposed lenders to unsecured loans threatening their balance sheets. This type of high-risk lending led to a wave of defaults that left several crypto companies anxious about the ensuing domino effect.

The transparent nature of DeFi could mitigate those concerns in future scenarios, proponents say.

“As more consumers and lenders move to blockchain to conduct business, it’s important to ensure that the balance is struck between the information that lenders need to assess risk and the privacy and anonymity expected by users of the technology,” said John Sun, CEO of Spring Labs, in a statement.

“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 blockchain while minimizing risk.”

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. 

And last year, a credit risk assessment startup Spectral raised $23 million to build and refine its credit scoring network.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Research Report Templates.png

Research

An overview of the Base Ecosystem, with a focus on market leaders.

article-image

Although bitcoin hitting $120k by year’s end is looking unlikely

article-image

About 270 million HYPE has been claimed, valued around $7.6 billion

article-image

Stanford professors David Mazières and Dan Boneh will lead the lab alongside a cohort of graduate student researchers

article-image

With more companies holding BTC, bitcoin yielding strategies could become “a new corporate finance norm,” CoinShares posed

article-image

The proposal comes after Polygon governance considered a controversial use of bridged liquidity for yield

article-image

Can the community balance its decentralized ethos with the need for inclusivity and constructive debate?