I will be contributing to Fox Business on a story about new start-up companies that mine social network data in determining loan applications. I mean, can you believe this? If I have too many friends with low credit scores, this could affect my own creditworthiness. Here’s the blurb from Fox Business:
YOUR FACEBOOK PROFILE COULD CHANGE YOUR CREDIT SCORE
Big data once reserved for use by companies to target their advertising, may now determine your ability to get a loan. Some tech startups that are now using social data as a way of measuring credit worthiness, which could make securing a loan significantly easier – but that also depends on how you behave on the web. The company Lenddo for example, judges your credit worthiness based your Facebook friends. If your roster is full of people with high credit scores they can pass the same onto you, but if you interact often with someone who’s delinquent on a loan, they can blow your chances of getting one. LendUp on the other hand looks at social media to fact check prospective borrowers’ applications. Another lender Kreditech says that it uses up to 8,000 data points when assessing a loan application including location, likes, friends, what kind of apps and operating systems you use, even how you click around their webpage. Take your time reading through loan information on Kreditech’s website and your chances of getting the loan improve, fill out the application in no caps or all caps, and they go down. Then there are companies like Kabbage, which says it can use data from a company’s online payment accounts like eBay and Paypal to assess creditworthiness and transfer loan money in just seven minutes. For now these tech startups are still a niche market, but analysts say their methods are on the verge of going mainstream.