TransUnion, a leading global credit reporting agency, has announced that it will be launching a new service that will provide identity-protected credit scoring for decentralized finance (DeFi) lending. This move is expected to increase transparency and security in the DeFi space, which has been plagued by issues related to identity verification and credit scoring.
The new service, which is set to launch in the coming months, will allow DeFi lenders to access credit scores for borrowers without compromising their personal information. This is a significant development for the DeFi industry, as it will enable lenders to make more informed decisions about who they lend to, while also protecting the privacy of borrowers.
According to TransUnion, the new service will use a combination of traditional credit data and alternative data sources to generate credit scores for DeFi borrowers. This will include data such as payment history, income, and employment status, as well as non-traditional data sources such as social media activity and online shopping behavior.
The use of alternative data sources is a key feature of the new service, as it will enable lenders to assess the creditworthiness of borrowers who may not have a traditional credit history. This is particularly important in the DeFi space, where many borrowers are seeking loans for cryptocurrency-related activities and may not have a credit history in the traditional sense.
TransUnion’s new service is also expected to increase transparency in the DeFi space by providing lenders with more information about the borrowers they are lending to. This will help to reduce the risk of fraud and default, which are major concerns for DeFi lenders.
Overall, the launch of TransUnion’s new service is a positive development for the DeFi industry, as it will help to increase transparency and security in the lending process. By providing identity-protected credit scoring, TransUnion is helping to address some of the key challenges facing the DeFi space and paving the way for further innovation in the future.