Could Your Facebook Friends Actually Affect Your Credit?
- Posted on December 19, 2011 at 4:33pm by
Liz Klimas
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Traditionally, your credit score is determined by things like steady employment, paying bills on time, outstanding loans and number of inquiries into your credit history. But one lending firm is adding Facebook friends to the list.
How can your Facebook friends affect you’re ability to get a loan? Lenddo, a microlending firm based in Hong Kong, believes that the likelihood of your friends to pay back loans or not could be indicative of your habits as well.
The New York Observer’s Beta Beat has more on what the company says is “the world’s first credit scoring service that uses your online social network to assess credit”:
The company’s algorithm is proprietary and secret, said CEO Jeff Stewart, but the primary metric is what Lenddo knows about the people you’re friends with. “We think that in the age of the internet you should be able to establish your reputation and your identity through your social graph, through your on- and offline community, and use that to get access to financial products and information,” he said.
If Lenddo sees one of your best Facebook buddies took out a loan and paid it back, there’s a good chance you will too. “Our backgrounds are in machine learning and pattern recognition,” Mr. Stewart said. “It’s some serious math.
Beta Beat tested out getting a loan and was asked for its Facebook account, as well as Gmail, Twitter, Yahoo and Windows Live. It was then given a credit score. To apply for an actual loan, it would need to have at least three friends with connections to Lenddo and a decent credit history themselves.
What’s more, Beta Beat reports that if you default on your loan, the company reserves the right to broadcast this information to your friends. After all, they could be affected by your credit score as well:
“I think Mark Zuckerberg said it best,” Mr. Stewart said. “Every industry will be in fact impacted by social.”
Banks have been curious about using social media to gauge risk for at least a year, said Matt Thomson, VP of platform at Klout, which calculates “influence” based on a user’s social media activity. Determining creditworthiness is not a core product of Klout’s, he said, but banks have approached the startup to ask about it. He wouldn’t name names. “It’s really like the who’s who of banking,” he said.
While some may consider this an extreme invasion of privacy, others like media theorist Douglas Rushkoff, Beta Beat reports, don’t consider such a thing as private anymore:
“We’re already in the nightmare scenario,” he wrote in an email. “They already know everything about you—more than most of us realize. If anything, the addition of social networking information to this data mining will help us come to some understanding of how much more these companies know about us than we know about ourselves.”
As of right now, loans are only offered in the Philippines, but Beta Beat reports that the company recently hired an ex-Google employee to begin on in America.
[H/T IT World via PC World]
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Comments (71)
Mikev5
Posted on December 19, 2011 at 5:46pmFacebook and all those I don’t use them or want to use them as for credit cards you are better off not using them all they do is get you in debt stay away I dumped my cards 10 years ago and have a credit score of 740 you don’t need credit cards to have a good score just buy a car and pay it off will get you a great score or pay a medical bill off with payments will do the same thing.
It’s simple if you don’t have the cash to buy it you just don’t buy it… this will keep you out of the insane credit card debt cycle.
Credit cards make it easy to get in trouble in the blink of the eye you are in debt.
Report Post »wordweaver
Posted on December 19, 2011 at 6:03pmI see you also exercise economy in the use of punctuation.
Report Post »Mitch64622
Posted on December 19, 2011 at 6:24pmBhahaha. Wordweaver.
Report Post »The10thAmendment
Posted on December 19, 2011 at 7:02pmCan’t possibly affect me. I refuse to use rinky dink government run sites.
Report Post »poverty.sucks
Posted on December 19, 2011 at 7:10pmFrom what you’re stating, your online activities are not centered around friends and family, therefore no accountability. You posses an inability to manage financial matters. Is there anything else you’d lime to add?
Report Post »TXPilot
Posted on December 19, 2011 at 7:23pmThere is one more little detail, that might cause people angst concerning this article. It‘s great if you don’t ever borrow money, but if you have car insurance, some companies are using credit scores to not only determine your rate in-part, but also whether or not to even sell you a policy. You may never take out a bank loan, but you might find yourself walking, because your credit score was an issue when you tried to obtain mandated liability coverage.
Report Post »The10thAmendment
Posted on December 19, 2011 at 7:35pmActually I’m closer to my family and friends than probably most people. I don’t need a government infested social network site to take a couple hour drive to put my arms around my mom and dad and tell them how much I love and appreciate all that have done and continue to do for me. My brother who is just back from Afghanistan and I shared letters and video chat weekly. Both of my sisters live down South and we trade visits regularly, and our computers are direct linked complete with video. Another brother out West and I get together 5 or 6 times a year and hunt, or go out on the ocean fishing with several friends. Another brother who’s playing a little ball at the University of Texas. Work annually with Christian Athletes in Action. Transunion has my credit score at 810. One of my sisters posts here, and she doesn’t use facefreak either. My dad has posted here several times today!
My online activities are centered on what interests me. Politics the Constitution and God. I need no more “accountability” than that. Especially not from a government run social network like facefreak.
Report Post »The10thAmendment
Posted on December 19, 2011 at 7:37pmHey BLAZE. Why would the word D I N K (as in rinky d i n k) get censored? That’s hilarious.
Report Post »chfields62
Posted on December 19, 2011 at 8:50pmCredit cards cause debt like guns cause crime…..If you can’t use them properly, you have no one to blame but yourself. However, it is ridiculous to base your creditworthiness off of others behaviour. Looks like another excuse to jack up rates….
Report Post »Marci
Posted on December 19, 2011 at 10:43pmWhat a crock of crap.
Report Post »TheLeftMadeMeRight
Posted on December 20, 2011 at 9:21amSeriously, word weaver? the troll problem on here is out of control, we don’t need the grammar police too…
Report Post »deeberj
Posted on December 20, 2011 at 1:52pmYou need some sort of credit to have a credit score. You have to owe someone something and pay it back. When I was 34 I stopped using credit cards. Never bought a home and had no car payments. I had no loans. After 20 years my credit score was ZERO. Yes, zero.
I had to get into debt to get a score, which is still in the 500‘s but I’m working on getting it higher.
Report Post »Ruler4You
Posted on December 21, 2011 at 5:28pmActually, in NAZI germany if you weren’t “party” supporter you were treated the same way.
Report Post »geonj
Posted on December 19, 2011 at 5:44pmwell, the 99% won’t be getting any loans in the near future.
Report Post »sWampy
Posted on December 19, 2011 at 5:35pmWe wouldn‘t be in near the mess we are in if congress hadn’t been corrupt and had passed a law decades ago making these credit companies illegal. Their practice of selling personal information, and then extorting people to pay them to monitor the information they gather illegally is unbelievable. 95% of all credit card fraud would go away if the credit reporting companies didn’t exist.
Report Post »diablamonkey
Posted on December 19, 2011 at 5:34pmI have great credit cuz I pay my bills-NOT because of my social networking ability. Another reason to invade our privacy. I for one never opened an account on Slaybook and now I know why. It’s Big Brother in disuise.
Report Post »4X4in
Posted on December 19, 2011 at 5:30pmShould call it azzbook, thats all I see!
Report Post »rpp
Posted on December 19, 2011 at 5:30pmEvery time a read another article about “social networking”, I am glad I deactivated my Facebook account last fall, never did go on Twitter and, greatly limit the information on LinkedIn.
Report Post »markgl
Posted on December 19, 2011 at 5:30pmThat’s insane.
Report Post »stickandtwig.com
Posted on December 19, 2011 at 5:26pmCalculating risk based on anything but the individual’s personal behavior is akin to “holding the children guilty of the father’s crime,” something our founders rejected outright. It is also a violation of Natural Rights and Natural Law. What if the person is a priest or social worker and has accepted the people they serve as their Facebook friends?
This story reflects just one more symptom of a society that has lost its moral compass.
Report Post »HorseCrazy
Posted on December 19, 2011 at 5:42pmor you have family members who have lost jobs after paying their bills on time for their entire lives as well as friends. its garbage is what this is. just another way to use us like pawns.
Report Post »JSnake
Posted on December 19, 2011 at 10:56pmor, guilt by association to the extreme.
Report Post »ScienceIsNotEvil
Posted on December 24, 2011 at 12:46pm“holding the children guilty of the father’s crime,”
You just described Christianity.
Report Post »thekuligs
Posted on December 19, 2011 at 5:11pmYikes, so imagine if someone steals your identity or you are mixed up with someone with the same name as yours. I gave up debt years ago, I think people stalking you on social media and claiming you didn’t pay your bills on time would be harassment. I am sure it will stop the first few times the company gets sued. Lets see, I have 3000+ Twitter followers. Most of them are people in publishing or people who have read my book. This company thinks they should factor in my credit score? Yeah… super happy I don’t do debt anymore.
Report Post »Jinglebob
Posted on December 19, 2011 at 5:29pmI for one have mostly bailed out on Facebook. Remember, you are known for the friends you keep. When their pictures and posts make you blush maybe you should think about how people view you.
Report Post »Countrygirl1362
Posted on December 19, 2011 at 5:03pmJust another reason not to sign up with facebook.
Report Post »nueces
Posted on December 19, 2011 at 5:06pmTruly.
Report Post »Cynic-clinic
Posted on December 19, 2011 at 8:34pmAnyone using Facebook willingly gives up any right to privacy–if they thought they had any to start with. Big Advertising consideres FB a goldmine of information to bombard users with every type of sales schemes they can concoct. And consider this–FB users are giving away their valuable personal information to Big Advertising for free while BA rakes in billioms of big bucks without having to pay for any of it. What a scam.
Report Post »ltbdb
Posted on December 19, 2011 at 5:02pmAnother reason I don’t use Facebook!
Report Post »KCMike
Posted on December 19, 2011 at 5:00pmWhat if you don’t use FailBook?
Report Post »Bronco II
Posted on December 19, 2011 at 5:00pmFirst I have good credit second I don’t give a darn about it I own no credit cards and only have normal living expenses one small loan for a new central heat and a/c unit and will be paid off soon and it‘s taken out automatically thru my credit union and guess what haven’t missed one payment and it is a signature loan that is the best credit you can have.I don‘t buy what I can’t pay cash for or what I can’t afford.I separate my needs from my wants and GOD provides my needs.I’m a Dave Ramsey supporter and I always say when people ask me How are you? BETTER THEN I DESERVE.
Report Post »objectivetruth
Posted on December 19, 2011 at 4:57pmIf I hadb‘t read this I’d have thought it was an insider joke.C’mon you have got to be kidding me?I see nightmares from this on so many levels.Dagg it might just be time to grab the popcorn bowl its going to make for an interesting real life movie.
Report Post »Anonymous T. Irrelevant
Posted on December 19, 2011 at 4:54pmI guess there will be a lot of “un-friending” going on, soon.
Report Post »mrmikejohnson
Posted on December 19, 2011 at 4:53pmI think that might be innacurrate reporting from The Blaze. “steady employment” shouldn’t have any effect on your credit score. There are several factors the credit bureaus use (number of credit accounts, percentage of credit used, delinquent accounts, etc). I’ve never heard of steady employment used to calculate a credit score. It can be used as a factor in determining whether or not you get a job, but I don’t think it has anything to do with credit scores.
Report Post »thekuligs
Posted on December 19, 2011 at 5:13pmThis article is VIA PCWorld it’s at the bottom of the post
Report Post »SmallGovBigGuns
Posted on December 19, 2011 at 5:23pmi have heard that proof of a constant income stream can affect it. when you sign a lease application they like to see employment history. thats a pretty easy example of a company checking for it. companies like to have as much info as possible when making decisions. i think your being a bit closed minded
Report Post »sta
Posted on December 19, 2011 at 5:37pmThis article screams “Weekly World News”.
Report Post »It’s a small microlending business in Hong Kong. So why should I care?
rlo1007
Posted on December 19, 2011 at 4:51pmFacebook, one of the devil tools…
Report Post »BurntHills
Posted on December 19, 2011 at 4:47pmwhat’s facebook?
Report Post »EveLeRieux
Posted on December 19, 2011 at 4:47pmSoooo…people will just end up with false friends on fb who pay on time? This is a waste of money and brain cells.
Report Post »Silversmith
Posted on December 19, 2011 at 4:46pmAnother reason to screw credit in general. Pay cash.
Silversmith
Report Post »GUNNSUP
Posted on December 19, 2011 at 6:21pmYou got that right silver…
Report Post »COFemale
Posted on December 19, 2011 at 4:45pmWell all those friends to Occupy Wall Street better take a heads up.
Report Post »KickinBack
Posted on December 19, 2011 at 5:01pmI doubt they have any credit to lose.
Report Post »Eliasim
Posted on December 19, 2011 at 4:45pmThere’s a couple things that come to mind which serve the purpose of evil quite well, and Facebook is one of them.
Report Post »ozchambers
Posted on December 19, 2011 at 4:42pmwhat’s facebook?
Report Post »Baddoggy
Posted on December 19, 2011 at 4:38pmI have gone Gault…Won’t hurt me a bit.
Report Post »NeverSurrender
Posted on December 19, 2011 at 5:26pmGault had credit. Lots of things were sold on credit in the gultch then repaid. Dagny was offered several items and services on credit during her first trip to the gultch. It would probably help to read the book before spouting lines you read on the internet.
Report Post »RightThinking1
Posted on December 19, 2011 at 4:38pmIf they can, then Obama must have really bad credit.
Report Post »toomuchgovt
Posted on December 19, 2011 at 4:41pmNow that is Funny…..Any oh so true. Prepaid credit card anyone?
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