Block Opens Cash App Score to Outside Lenders, Claiming 38% More Approvals at Flat Losses
What happened. Block will let other lenders buy the credit score it built on its own customers' cash flow. On September 1 the company said its Cash App Score will be distributed to external lenders for the first time through Nova Credit's Cash Flow Intelligence Platform, with consumers choosing in the app whether to share it.1 2 The number Block is selling on is its own: inside Cash App Borrow, the score "approves 38 percent more customers at the same loss rate compared with traditional credit scores," and roughly 70 percent of active Borrow customers have FICO scores below 580.1 3
What Alternative Business Lenders Need to Know
Block did not announce a new lending product. It announced that the underwriting edge behind its own lending is now available to other lenders, and that the eligible list stops short of the ones competing with its other lending business. That boundary is in the release. The motive read into it below is this newsletter's analysis, not a reason Block gives.
What exactly is Block selling?
A score, delivered through someone else's pipe. Cash App Score is "a proprietary, real-time credit signal" built from "millions of real-time, first-party signals from across the Cash App ecosystem," which Block says reflects current behavior rather than credit history alone.1 Customers see the number in the app's Money Tab and decide whether and how it is shared, with Cash App handling consent and notifications, so a lender never asks the applicant to log in anywhere new.1 Nova Credit embeds the score in the underwriting workflows its lender customers already run, alongside Cash Atlas, which turns consumer-permissioned bank transaction data into more than 1,000 attributes and a cash-flow risk score.1 12 Juan Hernandez, Block's head of credit and underwriting, put it plainly: "We built Cash App Score to see the financial activity of millions of people the traditional credit system misses."2 The two companies will say more at Nova Credit's Cash Flow Intelligence Summit in New York on September 10.1
The score itself is not new. Block launched it as a consumer pilot on November 19, 2025, tied to Cash App Borrow eligibility, saying then that more than 70 percent of active Borrow customers had FICO scores under 580 while repaying at 97 percent.4 What is new on September 1 is the distribution deal: the first time the number leaves Block's own funnel.1 3
How good is the 38 percent claim?
It is Block's number, from Block's book, with no third-party validation published. The release says the score approves 38 percent more Borrow customers "at the same loss rate" than traditional scores, and that Block's modeling shows potential for 30 percent more auto approvals and 28 percent more card approvals "at comparable loss rates."1 Those last two are modeled, for products Block underwrites for no one.
The book that produced the Borrow number is unusual. Cash App Borrow loans averaged under $100 and about one month when Block moved origination into its Utah industrial bank, Square Financial Services, after FDIC approval in March 2025, on nearly $9 billion of Borrow originations in 2024.8 A month-long, sub-$100 loan to a customer whose paycheck already lands in your app is a very different credit problem from a 60-month auto loan. The release does not claim otherwise, it claims the signal transfers. Lenders will have to test that on their own tapes.
Then there is the loss line. Block's Q1 8-K exhibit reported consumer lending originations of $17.6 billion, up 82 percent, against losses of $500.1 million, up 195 percent.6 The Q2 10-Q puts those losses at $585.5 million for the three months to June 30, against $294.1 million a year earlier.5 On the Q2 call, CFO Amrita Ahuja said origination volume "grew 59% year over year supported by the expansion of short-term liquidity products," and Jack Dorsey listed "how we're monetizing Cash App score" among the newer monetization opportunities.7 Losses rising faster than originations is consistent with a lender pushing down the credit spectrum on purpose. It is also the pattern a buyer of the score should ask about before paying for it.
Why is small-business lending not on the list?
Because Block already sells that loan. The permitted verticals are credit cards, auto lending, device financing, personal lending and tenant screening, described in the release as "all areas where Cash App does not compete." Block does not name Square Loans anywhere in the announcement. The connection follows from its own framing of who is eligible, which makes it a read rather than a disclosure.1 Block's other lending business, Square Loans, underwrites sellers on "transaction volume and revenue patterns," has originated more than $32 billion since 2014 at an average of about $10,000 per loan on Square's own count, and put out $5.7 billion in 2024 by deBanked's tally of its disclosures.9 10 That is cash-flow underwriting of small businesses, the same discipline MCA, revenue-based and factoring operators practice, run by the company now licensing its consumer cash-flow score to everyone else.
The bridge to this readership is the borrower, not the product. The sole proprietor who takes a $15,000 advance is often the same person whose paycheck, tips and peer-to-peer transfers run through Cash App. Consumer lenders will now see that person's Block-derived score. Business lenders will not, unless Nova Credit later adds the vertical, and nothing in the release says it will.1 When Ahuja announced the industrial bank last year, she described "our proven underwriting mechanisms for businesses and now, consumers"; the September deal shares the consumer half and keeps the business half.8
What does the score change in a credit file?
It changes the paperwork before it changes the decision. Nova Credit states on its own site that it is a consumer reporting agency under the FCRA and that its cash-flow products deliver "FCRA-compliant attributes, reports, and scores."11 12 A score pulled through a CRA is a consumer report, so a lender that declines on it owes the applicant a specific reason. That route works whether or not the CFPB's Section 1033 open-banking rule ever takes effect, and right now it is enjoined and under reconsideration.14 The CFPB's 2022 circular on algorithmic underwriting says "ECOA and Regulation B do not permit creditors to use complex algorithms when doing so means they cannot provide the specific and accurate reasons for adverse actions."13 A lender adding the score to a waterfall needs to know which of Block's signals moved the number, and the release describes the inputs in categories, not factors. The commercial terms of the arrangement are Block's and Nova Credit's, and neither published them.1
Does Block have history a credit committee should know?
Yes, and it is about the app, not the score. On January 16, 2025 the CFPB ordered Block to pay up to $120 million in consumer redress and a $55 million penalty, finding Cash App ran weak security protocols and failed to investigate unauthorized transactions properly, and requiring 24-hour live customer service.15 Block said at the time that "the historical issues raised in this agreement do not reflect the Cash App experience today" and that it settled to resolve the matter rather than because it agreed with the findings.16 On July 8, 2026, 46 states led by Oregon and Texas announced a $45 million settlement over allegations that Block misled consumers about Cash App's safety and fraud protections, requiring live phone support and barring the safety claims at issue.17 None of that touches the score's predictive power. It does bear on who controls the identity and account-security layer underneath the signal a lender is about to buy.
Is cash-flow underwriting actually new?
No. FinRegLab's 2019 study tested the cash-flow variables and scores of six non-bank providers, Accion, Brigit, Kabbage, LendUp, Oportun and Petal, against actual loan performance, and Kabbage was a small-business lender.18 Nova Credit's cash-flow customers already include SoFi, MoneyLion, Chase and Sallie Mae.11 12 What is new is the source. Bank-transaction data must be permissioned and categorized by a third party. Block's score is computed by the platform that holds the deposits, the card and the loan, across 59 million monthly transacting actives as of March.6 That is a first-party signal at bureau scale, and it belongs to a lender.
What should operators do this month?
Three things, none of them a purchase. First, add "Cash App Score" to the consumer-report inventory in your adverse-action templates and dispute procedures now, because the first place it will appear is a co-applicant or guarantor file pulled through Nova Credit by a consumer lender you share customers with.11 13 Second, if Nova Credit approaches you, ask for a retro validation on your own book before any pricing conversation, and ask how a month-long, sub-$100 loan population maps to your term and ticket.8 Third, read the September 10 summit disclosures and Block's Q3 loss line together, because the score's value to an outside lender depends on whether the "same loss rate" holds as Block's own losses climb.1 5
Our Opinion
The interesting number in this release is not 38 percent. It is the missing vertical. Block spent a decade proving that a merchant's card receipts predict repayment better than a bureau file, built a business that originated $5.7 billion in 2024 by deBanked's count, and is now licensing the consumer version of that insight to a list of verticals it says it does not compete in. Block never draws the line to Square Loans itself. Draw it anyway and the shape is hard to miss.10 1 On that reading it is a rational decision, and a signal about where Block thinks its advantage sits. It is not in consumer scoring.
For operators who fund small businesses on cash flow, the practical effect is that the consumer lenders around your borrower just got a better view of them than you have, and the platform that has the best view of all is keeping the business side of it for Square. The response is not to buy the score. It is to make sure your own cash-flow read, on the accounts you can already see, is as current as Block's. The part Block is keeping is not the scoring math it just licensed out. It is the deposit, card and loan relationship that generates the data in the first place, and nobody is selling that.9
1-Minute Video: Why EIN Verification Should Be Step One in Your Lending Waterfall
Settle the entity before the rest of the file runs
An EIN that does not match the applicant's legal business name makes every check after it unreliable. Putting that match first means the Secretary of State pull, the UCC search and the license check all run against an entity you have already confirmed rather than one you assumed.
The TIN/EIN Verification API checks a business name and EIN pairing against IRS records in real time rather than a cached copy, and returns the IRS name, a match status and the IRS reason code. It validates a pair you supply and cannot discover an unknown EIN. The video shows that check running as the first step of a lending waterfall.
Free Tools for Lending Teams
Headlines You Don’t Want to Miss
The SEC on September 1 charged Mark D. Hanf, former CEO of Novato-based Pacific Private Money Group, and Hoai-Nam Chu Phan, former COO of a subsidiary, alleging they raised more than $80 million from about 190 mostly retail investors between December 2021 and November 2025 on the promise of real-estate-secured lending, then used new investor money for Ponzi-like payments to earlier investors. The complaint alleges Hanf misappropriated more than $7 million, and that by February 2026 the two funds held under $17 million of recoverable assets against almost $121 million outstanding.19 Federal prosecutors in San Francisco filed parallel charges of conspiracy to commit wire fraud against both men and money laundering against Hanf, alleging about $103 million from more than 175 investors. Both waived indictment, pleaded not guilty and were released on $250,000 bonds, with hearings set for September 23 and September 30.20 Both consented to SEC judgments imposing permanent injunctions, with monetary relief set later, Investment Executive reports.21 The allegations are untested. The lesson for anyone funding from retail investor pools is that a "redeemable within 30 days" promise on illiquid real-estate loans is a liquidity claim regulators read as a representation.
Figure Technology Solutions' Form 8-K filed September 1 reports the Kiavi merger closed under the June 10 agreement, with cash consideration net of cash acquired of about $590 million for Kiavi's technology platform and DSCR loans, funded mainly from Figure's $600 million of 8.5 percent senior notes due 2031. Figure repaid Kiavi's credit agreement and terminated a Deutsche Bank repurchase agreement at closing.22 The June announcement priced the whole transaction at $717 million, cited Kiavi's 2025 revenue above $250 million, and projected more than $7 billion of new annual first-lien volume, with a Figure and Sixth Street joint venture buying loans off Kiavi's balance sheet.24 Kiavi's residential transition and DSCR platform rolls out across Figure's more than 480 ecosystem partners, and Kiavi CEO Arvind Mohan joins as chief business officer.23 Same shape as last week's Velocity and Toorak deal: the buyer pays for the origination machine and someone else takes the book.
Solifi, the TA-backed secured-finance software vendor, said September 1 it acquired Inovatec Systems, the Vancouver-based provider of the Propel digital portal, a loan origination system and a loan management system used by banks, captives, credit unions and specialty lenders across North America. Inovatec was founded in 2006 by Vladimir and Danijela Kovacevic, has grown past 160 people, and financial terms were not disclosed.25 ABF Journal notes Solifi's platform spans equipment finance, private credit, automotive, wholesale finance and working capital, and Monitor Daily quotes CEO Dan Corazzi calling automotive finance "one of the clearest examples of why connected technology matters."26 27 Equipment and specialty lenders running either stack should expect roadmap consolidation and ask for it in writing.
Sources
1 Block, Inc. | Block Will Open Its Cash App Score to Lenders with Nova Credit's Cash Flow Intelligence Platform as Partner (September 1, 2026)
2 PYMNTS | Block Lets Lenders Access Cash App Credit Insights (September 1, 2026)
3 Digital Transactions | Eye on Block: Cash App Score Gains Visibility (September 2, 2026)
4 Block, Inc. | Cash App Score Pilot Launches Utilizing Near Real-time Data (November 19, 2025)
5 SEC EDGAR | Block, Inc. Form 10-Q for the quarter ended June 30, 2026
6 SEC EDGAR | Block, Inc. Form 8-K Exhibit 99.1, first quarter 2026 results (May 7, 2026)
7 The Motley Fool | Block (XYZ) Q2 2026 Earnings Call Transcript (August 12, 2026)
8 Block, Inc. | Square Financial Services, Inc. Receives FDIC Approval to Offer Consumer Loan Product Cash App Borrow (March 13, 2025)
9 Square | Square Expands Access to Capital, Financing More Sellers with Innovative, Tech-Powered Underwriting (March 27, 2026)
10 deBanked | Square Loans Originated $5.7B in Business Loans in 2024 (February 25, 2025)
11 Nova Credit | Company site: consumer reporting agency statement, customer count and named clients
12 Nova Credit | Cash Atlas: cash flow underwriting attributes, reports and scores
13 CFPB | Circular 2022-03: Adverse action notification requirements in connection with credit decisions based on complex algorithms (May 26, 2022)
14 Cozen O'Connor | Section 1033 Compliance Date: Open Banking Rule Enjoined and Under Reconsideration (April 9, 2026)
15 CFPB | CFPB Orders Operator of Cash App to Pay $175 Million and Fix Its Failures on Fraud (January 16, 2025)
16 PYMNTS | CFPB: Block Must Pay $175 Million for Cash App's Weak Security Protocols (January 16, 2025)
17 Oregon Department of Justice | AG Rayfield Announces $45 Million Multistate Settlement with Block Inc. Over Deceptive Practices on Cash App (July 8, 2026)
18 FinRegLab | The Use of Cash-Flow Data in Underwriting Credit: Empirical Research Findings (July 2019)
19 SEC | SEC Charges San Francisco Bay Area Private Fund Executives with Multimillion Dollar Ponzi-Like Scheme, Release 2026-82 (September 1, 2026)
20 The Press Democrat | Executives of Marin County's Pacific Private Money plead not guilty in Ponzi case (September 1, 2026)
21 Investment Executive | Pair charged in real estate investment scheme (September 2, 2026)
22 SEC EDGAR | Figure Technology Solutions, Inc. Form 8-K, Item 2.01 completion of the Kiavi acquisition (September 1, 2026)
23 GlobeNewswire | Figure Completes Acquisition of Kiavi (September 1, 2026)
24 GlobeNewswire | Figure Enters into Agreement to Acquire Kiavi, Bolstering Blockchain-Native Marketplace (June 10, 2026)
25 Newswire.ca | Solifi acquires Inovatec, extending its unified platform across retail automotive and specialty finance (September 1, 2026)
26 ABF Journal | Solifi Acquires Inovatec (September 2, 2026)
27 Monitor Daily | Solifi Acquires Inovatec (September 2, 2026)
