Nu Holdings (NU): AI Credit Underwriting and $11B More Unused Credit Limits

Nu Holdings (NU) said on its 2026-08-13 earnings call that nuFormer, its in-house AI credit underwriting model, now sits inside the next generation of its core credit models and is being tested in credit cards for small and medium-sized businesses and with its Colombian customers [1]. The company did not give new figures this time on credit limits, credit quality or profit.

What nuFormer does inside Nubank's lending

Nu Holdings Ltd. (NU) is a Latin American digital banking group. Under the Nubank brand it offers credit cards, personal loans, digital accounts and payments through a mobile app in Brazil, Mexico and Colombia. Most of its revenue comes from interest on credit cards and loans, plus interchange fees when customers use their cards.

nuFormer is a family of AI foundation models the company built itself and trained on customers' transaction and behavioral records. The credit risk team uses it in the underwriting flow: the model first assesses the risk and value of an existing customer or a loan application, and that assessment then decides whether to approve, how much credit to extend and how to price a loan [2]. For a bank that earns most of its money from lending, this model sits in the core business. Its judgments directly decide how much the company is willing to lend and to whom.

From Brazil card limits to a shared credit model

Nu first disclosed nuFormer on its 2025-11-13 earnings call. At that point the company used it only to raise credit card limits for existing customers in Brazil. Management said the model allowed it to meaningfully increase limits for eligible customers while keeping the same overall risk appetite [4]. The model improvement was about 3x that of a typical successful upgrade, but the company did not say which metric it used to measure that. First-time credit for new customers, the lending business, Mexico and Colombia were not yet using the model.

The 2026-02-25 call gave the first operating readout and announced plans to extend the model to lending in Brazil and credit cards in Mexico [3]. By 2026-05-14, nuFormer was in production for credit card approvals in Brazil and Mexico and for unsecured personal loans in Brazil [2]. The latest call, on 2026-08-13, described it as a model shared across business lines that has entered the next generation of core credit models, with SME credit cards and Colombian customers still in testing [1].

The $11 billion increase in unused credit limits

The clearest result came on the 2026-02-25 call. Chief Financial Officer Guilherme Lago said unused credit limits went from about $18 billion to $29 billion, an increase of about $11 billion, or roughly 60% [3].

Unused credit limits are room the company has already granted customers but that they have not yet spent or borrowed. The figure shows how much more willing Nu has become to extend credit. It is not new lending and it is not revenue. The company did not state the start and end dates for these figures, and it did not disclose how customers who received higher limits have performed on credit losses since.

On 2026-05-14, the company added that it can value, price and approve every personal loan request individually, based on predicted net present value, in under 1 second. It called these capabilities an important driver of the clear expansion of its credit portfolio over the past 12 months [2], but did not say how much of that expansion came from the model.

Why the credit limit gains are not yet profit

Two steps stand between higher limits and profit. First, customers have to actually use the new limits, turning them into purchase volume and interest-earning balances before they show up in interest income from credit cards and personal loans, and from there in net income. Second, profit only follows if credit losses do not rise along with the higher limits.

On the 2026-02-25 call, management said it was already seeing the first step: in the fourth quarter of 2025, Nu's share of purchase volume in Brazil rose by about 50 basis points [3]. The company gave no base for that share change and did not separate it from seasonality or other credit policy adjustments, so it cannot all be attributed to nuFormer. Asked whether these gains were already showing up in net income, Lago said they were not yet [3].

What is confirmed and what remains unquantified

What can be confirmed is that Nu has extended the same AI underwriting model from credit card limit increases in Brazil to credit cards in Mexico and personal loans in Brazil, and has used it to meaningfully loosen the credit limits available to customers. What has not been separately quantified is how much of the $11 billion in limits has become interest-earning balances, how much interest income it has produced, and whether credit loss rates held for customers who received higher limits. Until the company discloses that data, the application's contribution to profit cannot be confirmed.

Application assessment

• AI Credit Underwriting and Limit Decisions | Business position: core operations | Adoption stage: limited production | Scope: multiple businesses or regions | Value type: cost reduction

Sources

[1] Drillr - Nu Holdings Ltd. (NU) - 2026-08-13 - earnings call

"We first deployed NuFormer in our flagship credit portfolio in Brazil. Through 2025, we replicated the model in Mexico, demonstrating that the platform generalizes across markets. During the first half of this year, we extended it to unsecured lending in Brazil and to the next generation of our core credit models. We're now testing it in credit cards for SMEs and for our Colombian customers."

[2] Drillr - Nu Holdings Ltd. (NU) - 2026-05-14 - earnings call

"We're now able to use real-time AI valuation for every personal loan request, priced and approved individually based on its predictive net present value in under 1 second."

[3] Drillr - Nu Holdings Ltd. (NU) - 2026-02-25 - earnings call

"And you can see that unused credit limits went from about $18 billion to $29 billion. So an increase of about, you know, $11 billion, which, you know, accounts for about 60% increase in unused credit limits."

[4] Drillr - Nu Holdings Ltd. (NU) - 2025-11-13 - earnings call

"Translating this into business outcomes, our initial models enable a major upgrade to credit card limit policies in Brazil, allowing us to meaningfully increase limits for eligible customers while maintaining the same overall risk appetite."