- 170% of Cash App Borrow customers have FICOs of 580 or below, with repayment above 97%.
- 2Cash App Borrow originated $9B in 2024; Square Loans originated $5.7B.
- 3Block's Square Financial Services received FDIC approval in March to offer Cash App Borrow.
Block says most of its Cash App Borrow customers have weak credit scores yet repay at very high rates. In an interview published by the company, Juan Hernandez, head of credit and underwriting for Block's consumer lending divisions, said 70% of Cash App Borrow customers have FICO scores of 580 or below, with repayment rates above 97%.
Data over scores
Hernandez attributed the result to models that learn continuously from customer activity across Cash App and Afterpay. Block can see income, deposits, spending patterns, savings behavior and repayment behavior across its ecosystem, and uses that data to make predictions it says beat legacy third-party credit indicators.
Hernandez said the future of credit will rest on actual ability to repay rather than "outdated proxies." He argued that near real-time data and modern modeling can produce a system that is more inclusive and safer than traditional scores, which he said look backward, update slowly and often misclassify people who can manage credit.
Block's lending footprint
Cash App Borrow originated $9B in loans in 2024. Block's sister business Square Loans, which funds small businesses, originated $5.7B that year and is the largest online small business lender on the rankings the trade tracks.
In March, the FDIC approved Block's industrial bank, Square Financial Services Inc, to offer the Cash App Borrow loan product itself.
Source reporting: deBanked.
