Open 24/7/365

We Have A Life-Time Warranty /
Guarantee On All Products. (Includes Parts And Labor)

Equifax, TransUnion, Experian FICO Scores Grow Increasingly Inaccurate with Wider Crypto Adoption

The total amount of Americans with cryptocurrency holdings doubled from 7.95% in 2018 to 14.4% in 2019. Equifax, TransUnion, Experian FICO Scores Grow Increasingly Inaccurate with Wider Crypto Adoption

Today, 59.1 million Americans (28 percent of the adult population) own some form of crypto. At the same time, employees around the world increasingly select cryptocurrency as an alternative to fiat compensation, including prominent athletes in the CEBL, NBA, NFL and Nascar.

Equifax, TransUnion, Experian FICO Scores Grow Increasingly Inaccurate with Wider Crypto Adoption

Decentralized finance (DeFi) loans are also showing tremendous growth. Lenders like Genesis saw an increase in DeFi lending of 400% from $465 million in Q4 2020 to $2.4 billion in Q1 of 2021. MasterCard and Visa have also announced cryptocurrency support. When you consider that cryptocurrency did not exist a decade ago, and yet is currently worth $1.56 trillion, you begin to appreciate why crypto and decentralized finance are now essential asset classes in the modern finance landscape.

Every sector of the modern financial system has acknowledged the resilience of decentralized finance as an inescapable component of our financial future, with one egregious omission: FICO credit scores. FICO credit scores have long been the tool of choice in Institutional finance for quickly evaluating a prospective lender’s creditworthiness. It excels at being a quick, portable, and complete summary of a borrower’s financial capability.

However, the inherently anonymous nature of DeFi presents a unique challenge to this type of system that relies heavily on identity verification. To date, none of the “Big Three” credit bureaus, TransUnion, Equifax, or Experian have produced a solution to this problem. This failure means as crypto gains more and more user adoption, FICO credit ratings will become progressively inaccurate as a tool for financial assessment.

Big Problem; Big Opportunity

The Problem

The anonymous nature of cryptocurrency presents the most obvious problem for FICO scores. A borrower’s financial commitments — positive or negative — are invisible to the Bureaus. Credit utilization obfuscation is a less obvious challenge presented as a result of the proliferation of DeFi, — specifically Crypto loans. This threat is illustrated perfectly in an excerpt from an article published by BlockFi entitled, “Will a Crypto Loan Affect my Credit Score?”

Carrying significant balances across your credit cards can drag down your credit score. ‘Credit utilization’ is dictated by those carried balances and is calculated by taking your statement balances and dividing it by your credit limits. This calculation makes up 30% of your credit score. The lower the utilization, the better. Typically utilization at around 25% of total credit card limits starts to hurt your score.

Some BlockFi clients use their loan to pay down those outstanding balances. This can go a long way towards improving your FICO and credit scores.

Because of the significance FICO scores give to credit utilization, obfuscation has the potential to significantly invalidate the score.

Equifax, TransUnion, Experian FICO Scores Grow Increasingly Inaccurate with Wider Crypto Adoption

The Opportunity

For many, the catalyst for the departure from decentralized finance has more to do with opportunity than obfuscation.

Solving the DeFi/FICO problem will not only improve the accuracy of the FICO scores, it will help give insight for developing more compelling products for those underserved by traditional financial products.

Utilization obfuscation is a critical problem for both DeFi and FICO credit rating agencies. Those who pioneer innovations that solve this issue will undoubtedly create new opportunities in the other.

The Solution: How LedgerScore Solves FICO’s DeFi problem With LedgerScore GhostIdentity

Introducing LedgerScore GhostIdentity

Wallet addresses are like bank accounts. The accuracy of any DeFi transaction history is directly proportional to the completeness of each user’s decentralized financial identity — that is, across as many financial properties (wallets, loans, tokens etc.) as possible. LedgerScore GhostIdentity was created as a secure, anonymous, and easy way to associate your financial identity across the entire DeFi landscape.

While LedgerScore GhostIDs are anonymous by design, they provide a user with the portability to leverage their DeFi identity in traditional finance. LedgerScore envisions a future where a user has the choice to have their LedgerSore GhostIdentity verified by a bank via our partner API and utilize a favorable DeFi transaction history to secure a loan in traditional finance.

Similar to Bank API access, FICO bureaus will have the ability to allow users to associate their LedgerScore GhostIdentity with their FICO credit ratings.

Beyond LedgerScore GhostIdentity

LedgerScore GhostIdentity Is Just One Of Three (3) Core Technologies That Combine To Solve Some Of The Toughest Problems Plaguing Defi Lending. Here Are The Other Two:

* LedgerScore Defi Credit Score
* LedgerScore GhostSignature

LedgerScore Credit Score

LedgerScore scores are calculated by a proprietary scoring engine produced in collaboration with some of the largest DeFi lenders. LedgerScores are generated by a combination of deterministic and intelligent systems. The deterministic layer of the score is calculated by evaluating a variety of on-chain behaviors to extrapolate key markers such as transactional activity, preferred token mix, combined balance across all wallets and locked tokens (or utilization).

LedgerScore GhostIdentity also opens up a unique opportunity to extract intelligence across a combined crypto identity — that is, spanning several wallets and currencies to create the most accurate image of the borrower.

The second layer of the score is calculated based on our Artificially Intelligent Risk Inference engine, A.R.I.. On a very high-level, A.R.I. ingests detailed transactional data across several wallets and compares them against prototypical data models from successfully executed loan agreements. In essence, with the help of our DeFi Lending partners, A.R.I. is able to extract high and low risk patterns.

The best part about A.R.I. is, with each loan execution it becomes more accurate. A.R.I. is part of LedgerScore’s big plays towards finally meeting the Industry goal of automated, DeFi loan risk assessment. We believe it is one of the final pieces necessary to realize the full disruptive potential of decentralized finance.

LedgerScore GhostSignature

The primary goal of LedgerScore is to provide our users with the most competitive loan rates, and for our DeFi loan partners, the best tools to evaluate prospective borrower risk. LedgerScore GhostSignatures were created as an optional, supplementary risk mitigation protocol for DeFi lenders.

At a very high level, LedgerScore GhostSignatures allow a LedgerScore user to collateralize their verified KYC in the form of a double-blind smart contract. When a borrower successfully repays a loan initiated with a GhostSignature it closes the smart contract and the borrower’s KYC is never revealed. The borrower’s GhostIdentity is updated to reflect the successful repayment of the loan, and a score bonus is applied.

In the event of a default, the borrower’s KYC will become available to the Lender. This enables traditional, legal forms of collection, significantly increasing the probability of recovery.


Blockchain technology presents a unique opportunity to completely disrupt traditional finance systems. LedgerScore is fully invested in realizing the full potential of the decentralized finance future, and are committed to building the tools to make it possible.

Updated: 7-25-2021

FICO Score’s Hold On The Credit Market Is Slipping

Three-digit number has been linchpin of consumer-credit decisions, but banks are increasingly relying on their own scores.

For decades, nearly every consumer credit decision revolved around a three-digit number—the FICO credit score. That is changing.

FICO has long dominated the market for consumer credit, providing scores for some 200 million U.S. consumers that are used by a whole host of lenders to evaluate credit-card, auto-loan and mortgage applicants. For borrowers, higher scores can mean bigger loans and lower interest rates.

But powerful forces are aligning to challenge its dominance.

Big lenders are moving away from FICO, according to people familiar with the matter. Capital One Financial Corp. and Synchrony Financial don’t use its scores for most consumer-lending decisions. They are becoming a smaller factor in some underwriting decisions at JPMorgan Chase & Co. and Bank of America Corp.

A key financial regulator, meanwhile, is encouraging banks to de-emphasize credit scores in an effort to expand access to affordable credit. And housing-finance giants Fannie Mae and Freddie Mac are considering allowing lenders to use other scores when evaluating mortgage applicants.

There are a few reasons for the shift. Many lenders now review a wealth of new data and use it to refine their own proprietary scores that they say are better able to predict who will repay and who won’t. Regulators are concerned that FICO leaves too many Americans behind, limiting them to payday loans and other costly forms of credit. Some 53 million U.S. adults lack traditional FICO scores because they have thin or nonexistent borrowing histories.

“FICO scores are good, but they’re not perfect,” said Roger Hochschild, chief executive of Discover Financial Services. The company relies less on FICO scores when evaluating existing or prior customers and more when applicants are brand-new to Discover, he said.

‘FICO scores are good, but they’re not perfect.’
— Roger Hochschild, Discover Financial Services CEO

FICO’s waning influence could become a problem for the roughly $16 billion company behind it: Fair Isaac Corp. FICO scores account for about 40% of the company’s revenue but nearly all of its profits, according to people familiar with the matter.

The company has increased its price for traditional FICO scores significantly in recent years, to around 25 cents apiece for underwriting purposes from 15 cents to 18 cents, eliciting complaints from some big lenders, according to people familiar with the matter. In recent months, it has offered lenders free access to two newer credit scores meant to boost loan approvals among applicants with slim credit histories, other people said.

“We see no evidence in our business to indicate the marketplace is using the FICO score less,” said a FICO spokeswoman. “We realize lenders use, and in fact encourage lenders to use, the FICO score in conjunction with proprietary data and models to make the best decision possible.” The spokeswoman said that FICO didn’t materially increase the price of FICO scores for 25 years after the score’s introduction. “After decades of inflation, the real price of the FICO score effectively decreased,” she said.

FICO scores, which range from 300 to 850, are calculated using the information in people’s credit reports, such as payment history, credit-card debt relative to spending limits and recent credit applications.

Borrowers often check their FICO scores before they apply for credit. But the guessing game is getting harder. Big banks are increasingly approving applicants with low FICO scores or rejecting those with high scores if alternative metrics point in a different direction, lending executives said.

Still, the scores are a mainstay in many consumer credit decisions. The company sold more than 10 billion FICO scores in the past 12 months, a figure that has remained steady during the last few years.

Lenders’ efforts to rely less on FICO scores accelerated during the pandemic. The scores don’t reflect deferment and forbearance programs, making it harder for lenders to evaluate borrowers. Some 48% of lenders feel less confident making consumer lending decisions based on traditional credit scores and reports compared with a year prior, according to a recent Aite Group survey of more than 20 lenders including banks, credit unions and financial-technology firms.

Bank credit executives say their own internal data and proprietary scores are more reliable. They factor in information from credit reports, deposit balances and overdrafts and their own prior lending relationships with applicants.

“There are many other sources of data that can indicate a person’s creditworthiness that weren’t available before,” said Will Graylin, a board member at Synchrony, the largest issuer of store credit cards in the U.S., and chief executive of payments startup OV Loop.


Equifax, TransUnion, Experian FICO,Equifax, TransUnion, Experian FICO,Equifax, TransUnion, Experian FICO,Equifax, TransUnion, Experian FICO,Equifax, TransUnion, Experian FICO,Equifax, TransUnion, Experian FICO,Equifax, TransUnion, Experian FICO,Equifax, TransUnion, Experian FICO,Equifax, TransUnion, Experian FICO,Equifax, TransUnion, Experian FICO,

Related Articles:

Ransomware Is The IRS Of Bitcoin

REvil Ransomware Hits 200 Companies In MSP Supply-Chain Attack

What It Will Take To Protect Cities Against Cyber Threats

Home Security Company ADT Betting On Google Partnership To Build Revenue

Carnegie Cyber Kids Academy. World’s Most Prestigious Cyber Defense Training Facility

How To Opt Out Of Amazon’s Bandwidth-Sharing Sidewalk Network

Carnival Discloses Breach of Personal Data On Guests And Crew

UK Cyber Chief Cameron Says Ransomware Key Online Threat

The FBI Secretly Ran The Anom Messaging Platform, Yielding Hundreds Of Arrests In Global Sting

Federal Reserve Hacked More Than 50 Times In 4 Years

All of JBS’s US Beef Plants Were Forced Shut By Cyberattack

It Wasn’t Until Anonymous Payment Systems That Ransomware Became A Problem

How To Use Ian Coleman’s BIP39 Tool For Finding Bitcoin Addresses And Private Keys From A Seed Phrase

A New Ransomware Enters The Fray: Epsilon Red

This Massive Phishing Campaign Delivers Password-Stealing Malware Disguised As Ransomware

Biden Proposes Billions For Cybersecurity After Wave of Attacks

Mobile Crypto ‘Mining’ App Possibly Connected To Personal Data Leak

Ireland Confirms Second Cyber Attack On Health System

US Unveils Plan To Protect Power Grid From Foreign Hackers

Hackers Breach Thousands of Security Cameras, Exposing Tesla, Jails, Hospitals

A Hacker Was Selling A Cybersecurity Exploit As An NFT. Then OpenSea Stepped In

Clubhouse And Its Privacy & Security Risk

Using Google’s ‘Incognito’ Mode Fails To Prevent Tracking

Kia Motors America Victim of Ransomware Attack Demanding $20M In Bitcoin, Report Claims

The Long Hack: How China Exploited A U.S. Tech Supplier

Clubhouse Users’ Raw Audio May Be Exposed To Chinese Partner

Hacker Changed Chemical Level In Florida City’s Water System

UK Merger Watchdog Suffers 150 Data Breaches In Two Years

KeepChange Foils Bitcoin Theft But Loses User Data In Sunday Breach

Hacker Refuses To Hand Police Password For Seized Wallet With $6.5M In Bitcoin

SonicWall Says It Was Victim of ‘Sophisticated’ Hack

Tor Project’s Crypto Donations Increased 23% In 2020

Read This Now If Your Digital Wallet Which Holds Your Crypto-currencies Can Be Accessed Through Cellular, Wifi, Or Bluetooth

Armed Robbers Steal $450K From Hong Kong Crypto Trader

Is Your iPhone Passcode Off Limits To The Law? Supreme Court Ruling Sought

Researchers Warn 3 Apps Have Been Stealing Crypto Undetected For A Year

Ways To Prevent Phishing Scams In 2020

The Pandemic Turbocharged Online Privacy Concerns

US Treasury Breached By Foreign-Backed Hackers

FireEye Hack Portends A Scary Era Of Cyber-Insecurity

How FinCEN Became A Honeypot For Sensitive Personal Data

Apple And Google To Stop X-Mode From Collecting Location Data From Users’ Phones

Surge In Physical Threats During Pandemic Complicates Employee Security Efforts

Imagine A Nutrition Label—for Cybersecurity

Cybercriminals Attack GoDaddy-based Cryptocurrency Platforms

Biden Team Lacks Full U.S. Cybersecurity Support In Transition Fracas

Nasdaq To Buy Anti-Financial Crime Firm Verafin For $2.75 Billion

Mysterious Software Bugs Were Used To Hack iPhones and Android Phones and No One Will Talk About It

Dark Web Hackers Say They Hold Keys To 10,000 Robinhood Accounts #GotBitcoin

Hackers Steal $2.3 Million From Trump Wisconsin Campaign Account

Crypto Scammers Deface Trump Campaign Website One Week From Elections

Telecoms Protocol From 1975 Exploited To Target 20 Crypto Executives

With Traders Far From Offices, Banks Bring Surveillance To Homes

Financial Systems Set Up To Monitor Unemployment Insurance Fraud Are Being Overloaded (#GotBlockchain?)

A Millionaire Hacker’s Lessons For Corporate America

Container Shipping Line CMA CGM Says Data Possibly Stolen In Cyberattack

Major Hospital System Hit With Cyberattack, Potentially Largest In U.S. History

Hacker Releases Information On Las Vegas-Area Students After Officials Don’t Pay Ransom

Russian Troll Farms Posing As African-American Support For Donald Trump

US Moves To Seize Cryptocurrency Accounts Linked To North Korean Heists

These Illicit SIM Cards Are Making Hacks Like Twitter’s Easier

Uber Exec Allegedly Concealed 2016 Hack With $100K BTC ‘Bug Bounty’ Pay-Off

Senate Panel’s Russia Probe Found Counterintelligence Risks In Trump’s 2016 Campaign

Bockchain Based Surveillance Camera Technology Detects Crime In Real-Time

Trump Bans TicToc For Violating Your Privacy Rights While Giving US-Based Firm Go Ahead (#GotBitcoin?)

Facebook Offers Money To Reel In TikTok Creators

How A Facebook Employee Helped Trump Win—But Switched Sides For 2020

Facebook Rebuffs Barr, Moves Ahead on Messaging Encryption

Facebook Ad Rates Fall As Coronavirus Undermines Ad Spending

Facebook Labels Trump Posts On Grounds That He’s Inciting Violence

Crypto Prediction Markets Face Competition From Facebook ‘Forecasts’ (#GotBitcoin?)

Coronavirus Is The Pin That Burst Facebook And Google Online Ads Business Bubble

OpenLibra Plans To Launch Permissionless Fork Of Facebook’s Stablecoin (#GotBitcoin?)

Facebook Warns Investors That Libra Stablecoin May Never Launch (#GotBitcoin?)

FTC Approves Roughly $5 Billion Facebook Settlement (#GotBitcoin?)

How Facebook Coin’s Big Corporate Backers Will Profit From Crypto

Facebook’s Libra Is Bad For African Americans (#GotBitcoin?)

A Monumental Fight Over Facebook’s Cryptocurrency Is Coming (#GotBitcoin?)

Alert! 540 Million Facebook Users’ Data Exposed On Amazon Servers (#GotBitcoin?)

Facebook Bug Potentially Exposed Unshared Photos of Up 6.8 Million Users (#GotBitcoin?)

Facebook Says Millions of Users’ Passwords Were Improperly Stored in Internal Systems (#GotBitcoin?)

Advertisers Allege Facebook Failed to Disclose Key Metric Error For More Than A Year (#GotBitcoin?)

Ad Agency CEO Calls On Marketers To Take Collective Stand Against Facebook (#GotBitcoin?)

Thieves Can Now Nab Your Data In A Few Minutes For A Few Bucks (#GotBitcoin?)

New Crypto Mining Malware Beapy Uses Leaked NSA Hacking Tools: Symantec Research (#GotBitcoin?)

Equifax, FICO Team Up To Sell Your Financial Data To Banks (#GotBitcoin?)

Cyber-Security Alert!: FEMA Leaked Data Of 2.3 Million Disaster Survivors (#GotBitcoin?)

DMV Hacked! Your Personal Records Are Now Being Transmitted To Croatia (#GotBitcoin?)

Lithuanian Man Pleads Guilty In $100 Million Fraud Against Google, Facebook (#GotBitcoin?)

Hack Alert! Buca Di Beppo, Owned By Earl Enterprises Suffers Data Breach Of 2M Cards (#GotBitcoin?)

SEC Hack Proves Bitcoin Has Better Data Security (#GotBitcoin?)

Maxine Waters (D., Calif.) Rises As Banking Industry’s Overseer (#GotBitcoin?)

FICO Plans Big Shift In Credit-Score Calculations, Potentially Boosting Millions of Borrowers (#GotBitcoin?)

Our Facebook Page

Your Questions And Comments Are Greatly Appreciated.

Monty H. & Carolyn A.

Go back

Leave a Reply