Hello, and welcome back to Cash Flow Conversations, a podcast series sponsored by Nova Credit.
If you’ve followed my work, you’ll know that I’m obsessed with cash flow data because it has enormous potential to positively reshape consumer lending in the U.S.
Cash Flow Conversations tracks that shift, from theory to practical use across the lending lifecycle.
In Episode 7, I’m joined by Juan Hernandez, who leads underwriting and credit policy across Block and started his career as a data scientist at FICO, to explore how traditional credit scores became detached from what they were designed to measure.
From there we get into the Cash App Score, the internal model Block built entirely on first-party data. Juan walks us through how Block’s Borrow model without credit report data performed just as well in statistical validation and delivered higher approvals and conversion with lower losses in an A/B test.
We talk about what it means to show that score to millions of customers directly inside the app, and why Juan thinks adverse action notices are the wrong model for how lenders should talk to the people they’re evaluating.
Finally, we get into what it takes for a score like this to work outside of Block’s own ecosystem: the partnership with Nova Credit, the question of whether Block becomes a credit reporting agency in its own right, and why Juan thinks the biggest obstacle to alternative data taking over isn’t the technology at all. It’s convincing the people who fund loans that a new set of numbers can be trusted the way FICO has been trusted for decades.
At its heart, this episode is about turning better underwriting from an internal lender capability into something customers can see, control, and carry into the broader market.
I hope you enjoy the conversation as much as I enjoyed having it!
—
This episode is brought to you by Nova Credit in collaboration with Block.
Nova Credit is a credit infrastructure and analytics company that enables businesses to grow responsibly by harnessing consumer credit data. Learn more at novacredit.com.
—
Sign up for Alex’s Fintech Takes newsletter for the latest insightful analysis on fintech trends, along with a heaping pile of pop culture references and copious footnotes. Every Monday, Wednesday, and Friday: https://workweek.com/brand/fintech-takes/
And for more exclusive insider content, don’t forget to check out my YouTube page.
—
Follow Alex:
YouTube: https://www.youtube.com/channel/UCJgfH47QEwbQmkQlz1V9rQA/videos
LinkedIn: https://www.linkedin.com/in/alexhjohnson
Twitter: https://www.twitter.com/AlexH_Johnson
Follow Juan:
https://www.linkedin.com/in/juan-hernandez-025a5532/
Learn more about Nova Credit here.