Block Says Traditional Credit Scores Shut Out 100 Million Americans

For much of modern consumer finance, underwriting has relied on static credit files that offer a delayed view of financial behavior. Those bureau-based models, Block Chief Risk Officer Brian Boates told PYMNTS, were designed for a slower economy and struggle to keep pace with how money now moves.

“The traditional credit system is measuring current financial behavior with outdated tools, leading to gaps and disconnects that are increasingly problematic for both lenders and borrowers,” Boates said in an interview.

Those gaps are not marginal. Boates said close to 100 million Americans are barred from accessing affordable credit because scoring models depend on backward-looking data rather than how people manage money today. In his view, the problem is not consumer behavior, but the tools used to evaluate it.

“When the focus shifts to near real-time data, there is better understanding of how people actually manage their money and ultimately, their creditworthiness,” he said.

Younger Consumers and the Limits of Traditional Credit

The disconnect is especially visible among younger consumers, who are increasingly skeptical of revolving credit and long-term balances. Boates said Generation Z has watched how traditional credit cards affected earlier generations and is actively searching for alternatives.

“Gen Z has seen the impact that credit cards have had on other generations, and they’re looking for an alternative,” he told PYMNTS.

That shift shows up in payment behavior. Boates cited Afterpay data showing that more than half of Gen Z consumers report getting the “ick” from credit cards, with 63% switching to alternative payment methods. Debit usage is also rising. At Afterpay, 90% of U.S. purchases are made with debit cards, signaling a preference for spending within available funds rather than carrying revolving balances.

For Block, these patterns reinforce the idea that traditional credit scores are increasingly misaligned with how consumers want to use credit.

Defining Behavioral Underwriting

Block’s alternatives are based on behavioral underwriting, which evaluates creditworthiness based on how customers conduct their financial lives on a daily basis rather than relying primarily on bureau histories.

“We’re using near real-time data to gain a better understanding of customers and their behaviors, from spending patterns to cash flow and beyond, to make better, more informed decisions,” Boates said.

By focusing on leading indicators rather than delayed reports, Block aims to widen access to credit without increasing risk. “By tracking behavioral signals that traditional methods do not capture and measuring what matters most, how people earn, save, spend and repay in real time, we’re able to expand access without increasing risk,” Boates said.

The Data Points That Matter Most

In practice, Block’s underwriting centers on a narrow but continuous set of signals. At Cash App, those signals are distilled into an internal Cash App Score derived from earning, saving, spending and repayment activity across the platform’s 58 million monthly active users.

“This approach has enabled 38% more Cash App Borrow loan approvals at the same loss rates compared to traditional credit underwriting,” Boates told PYMNTS.

Rather than making a one-time judgment, behavioral underwriting evolves with customer behavior. Credit access can expand as habits improve and contract when warning signs emerge, allowing risk decisions to adjust dynamically.

Scale Without Growth at All Costs

That discipline matters because Block’s lending operation is no longer experimental. Across Cash App Borrow, Afterpay and Square Loans, Block has provided access to more than $200 billion in credit globally, according to figures published this month.

Boates emphasized that scale alone is not the objective. “The most telling indicator of sustainable financial inclusion isn’t how many loans are being originated ,” he said. “It’s whether those loans are successful, as well as whether consumers continue to turn to us for their financial needs.”

He pointed to Afterpay performance during the 2025 Black Friday and Cyber Monday period, when 96% of U.S. Pay-in-4 customers paid off their purchases early or on time.

The Ecosystem Advantage

Block’s ecosystem is central to how behavioral underwriting works at scale. Cash App, Afterpay and Square provide a continuous view of financial activity across different use cases, allowing Block to see patterns that isolated lenders cannot.

The ecosystem also supports built-in safeguards. Missed Afterpay payments automatically pause borrowing. Limits adjust based on repayment behavior. Cash App Borrow typically starts small and grows only as customers demonstrate consistency, Boates said.

Measuring Success and Looking Ahead

For Block, success is measured by repayment performance, repeat engagement and long-term customer outcomes rather than short-term origination growth. Behavioral underwriting allows those metrics to be monitored continuously rather than inferred after the fact.

Looking five years ahead, Boates said Block will continue refining responsible underwriting as consumer expectations evolve, particularly as Gen Z’s economic influence grows.

“Ultimately, we view good credit as the intersection of responsible lending and responsible use of financial tools,” he said.

“That is not just a FinTech advantage,” Boates said. “This is the future of lending.”