Facebook and Twitter can hurt your credit score

Facebook and Twitter can already get you in trouble with friends, family, and your significant other. Many people have discovered affairs and cheating through Facebook and Twitter. Well now, the social media networks have a new trick. They can expose enough information for banks and credit agencies to determine your credit risk. Some banks are looking at this right now, and, according to BetaBeat, may implement it soon. One company already uses the method and is probably the first to implement it. Lenddo is a micro-lending firm based out of Hong Kong.The company currently serves the Philippines, but did hire an ex-Google chief to direct the upcoming Americas division.

The company asks for your Facebook account. Then it asks for access to Gmail, Twitter, Yahoo, and Windows Live. The company's algorithm is a secret, but the main metric is who you are friends with on Facebook and Twitter and what Lenddo knows about them. Jeff Stewart, the CEO of Lenddo, said the following:

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.

That's not all Lenddo does, as the site warns those who might default on a loan:

Failure to repay will negatively impact your Lenddo score, as well as the score of your Lenddo friends. Lenddo MAINTAINS THE RIGHT TO NOTIFY YOUR FRIENDS, FAMILY AND COMMUNITY if the borrower fails to repay, however, this is only done after several notifications to the borrower and an attempt to work out a payment plan.

Matt Thomson, Vice Preesident of Platform at Klout, said that banks have been approaching Klout to ask the company about gauging credit worthiness. For those who may not know, Klout gauges your influence based off your social media activity. He says that the list of banks is confidential, but is essentially "the who’s who of banking."

The credit agency known as FICO has said that they are always looking into new methods and processes to better serve their customers' needs. In other words, FICO and the other other two U.S. agencies, Experian and TransUnion, will probably use social media at some point to gauge your credit risk.

However, media theorist Douglas Rushkoff dismissed the notion that social media-based credit scoring is an erosion of privacy. He stated the following in regards to the idea that this is a nightmare scenario:

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.

He also pointed that if all of this leads to people lending to each other, it could be empowering:

Instead of everyone outsourcing their savings, investments, and borrowing to truly evil institutions who use what information they about us simply as an excuse to drain more money from us, we would invest in one another.

This should be interesting to watch as credit agencies and banks develop this idea more and actually implement it. For the time being, however, choose your friends wisely.

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In one corner we have Banks using our social information against us. In the other we have websites like LinkedIn that are bringing about a new social wall. These websites are great but once enough people starts using them, they become tools against us. LinkedIn has become a tool for HR departments to restrict hiring to those that are 'in the know' and have connections that can be tracked from a professional degree.

I kind of want to see all this happen though, because then we will see a shift back to people being more anonymous and cautious on the web. If it does I hope someone on the inside has the balls to put up a list of banks that are using information like this. With the banking industry already in enough hot water with the mortgage crisis, people only need a little more pushing before the market is forced to change.

who cares if you set your preference to friends only. I select my friends myself, and so informations goes to my friends and stop there. Credit agency won't see anything

As several other people have pointed out, if any bank or business asks for access to any my email accounts I will be taking my business elsewhere. It's completely unacceptable.

None of this is surprising at all, companies that are hiring new employees will sometimes use your credit score against you if they think it's too low they will not hire you, insurance companies will use your credit score against you when determining your rates, none of this facebook crap is surprising to me and since most people do not seem to argue against these horrible and unfair invasions of privacy, just about anything goes when it comes to using credit scores against people as long as nobody fights against it.

Order_66 said,
None of this is surprising at all, companies that are hiring new employees will sometimes use your credit score against you if they think it's too low they will not hire you, insurance companies will use your credit score against you when determining your rates, none of this facebook crap is surprising to me and since most people do not seem to argue against these horrible and unfair invasions of privacy, just about anything goes when it comes to using credit scores against people as long as nobody fights against it.

Why is it unfair to consider FICO when deciding employment? It shows lack of character to have a low score.

KingCrimson said,

Why is it unfair to consider FICO when deciding employment? It shows lack of character to have a low score.

It is 100% unfair and does not show lack of character at all, what if the person who is seeking a job was laid of or has a serious illness preventing them from working for long periods of time and their credit suffered as a result? it doesn't make them a high risk as a new employee at all and it certainly has absolutely nothing to do with their character in any way.
I could see not wanting to hire someone because they are a deadbeat when it comes to paying their bills but if it's circumstances beyond their control then they are sol and only getting beaten down even further for no good reason.

There should be laws for employers and insurance companies to prevent them from seeing your credit score but as long as nobody speaks out against this absurd invasion of privacy then nothing will ever be done about it.

Does anyone even use a credit score anymore? A lot of places here in SoCal don't even do checks anymore. Was able to get a house in the high desert which has grown a LOT since I last lived here as a kid. A chunk of our down payment was in silver bars.

Failure to repay will negatively impact your Lenddo score, as well as the score of your Lenddo friends. Lenddo MAINTAINS THE RIGHT TO NOTIFY YOUR FRIENDS, FAMILY AND COMMUNITY if the borrower fails to repay, however, this is only done after several notifications to the borrower and an attempt to work out a payment plan.

This part won't fly in the US. Think they need to take a look at the Fair Debt Collection Practices Act.

Tweaky Nippleton said,

This part won't fly in the US. Think they need to take a look at the Fair Debt Collection Practices Act. EDIT: I was beaten to it @.@

I posted a picture of my penis on Twitter, and my credit score went up 100 points. True story. The credit bureaus were that impressed.

Xenomorph said,
I posted a picture of my penis on Twitter, and my credit score went up 100 points. True story. The credit bureaus were that impressed.

was it because it was so small, that they knew there was no possible way you were ever going to reproduce, thereby getting into debt with home loans, raising kids, etc.?

SirEvan said,

was it because it was so small, that they knew there was no possible way you were ever going to reproduce, thereby getting into debt with home loans, raising kids, etc.?

Wow, talk about setting yourself up Xenomorph...Thank you for the laugh.

Ha, if any bank ever asks me for my Facebook or Twitter accounts and "demands" access to my Windows LIVE or any other email account you can best believe they will never hear from me again.

This is basically like invasion of privacy.

I could also see a court action lawsuit being able to be filed if they even ask for this information in the USA.

There's no way this will make it to NA. Completely ridiculous.

It's an invasion of privacy too, asking for your login information for Facebook and Gmail? WTF?

Lexcyn said,
asking for your login information for Facebook and Gmail? WTF?

You misread.
Not your credentials, just the public YOU that exists within those sites. The same way existing websites and fb apps ask for access to your friends list, etc., they want the same.

I would think its' so they can sell your friends list to collection agencies who will then hound your FB friends when you turn out to be a deadbeat.

dotf said,

You misread.
Not your credentials, just the public YOU that exists within those sites. The same way existing websites and fb apps ask for access to your friends list, etc., they want the same.

I would think its' so they can sell your friends list to collection agencies who will then hound your FB friends when you turn out to be a deadbeat.


Gmail is far from public. And the article actually said "access to " which for some of those would require login info. Also if your privacy settings on twitter and FB were set to block public access you would need login details there as well to get access to it.

Won't be many banks who'll do the scoring this way it will be the credit agencies the banks rely on. They already know far too much about us this will just add to it.

It's ridiculous that they will use your virtual and real friends as a means to score your credit worth.

This won't fly in the US... If they want to try to find me online, they can, however I won't give any information out that is not necessary, such as this information...

Guess I should start spamming rich people with friend requests then....

Extremely silly way to decide whether to give loans or not. I don't think they'll have much business after a while...


What?

the main metric is who you are friends with on Facebook and Twitter and what Lenddo knows about them.

So now it's not just about how I am as a financially responsible person, but also about how my friends are? That is what determines my credit score?
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.

Maybe you should be able to, but you should also have the option to decline from such an option.

so everyone who plays mafia wars and other games will never get a loan? you have to add 100's of people, why would they cause you to not get a loan?

wow....

Fear-mongering article. The three major credit score companies wouldn't be able to get away with it, and the assumption that they "will probably use social media at some point to gauge your credit risk" is not substantiated.

Ayepecks said,
Fear-mongering article. The three major credit score companies wouldn't be able to get away with it, and the assumption that they "will probably use social media at some point to gauge your credit risk" is not substantiated.

I've read in other media sources that they are indeed working on a way to use Social Media to "adjust" your credit score, since you already are not allowed to know 100% what goes into your credit score, there's really nothing we can do other than to not use SM at all.

z0phi3l said,
since you already are not allowed to know 100% what goes into your credit score
This is entirely what makes it plausible, and borderline likely. The entire credit system is a sham designed to screw you over. Close a credit card you're not using? They have a maximum amount of time that they can leave that card on your credit history. There is no minimum amount of time it must stay on.

As a good payer, that means good credit for longer. As a bad payer, that means bad credit for longer. So, good payers can lose the entire history of that credit within a month or two, while bad payers are stuck with it until the creditor is done with them. You can only cancel one after all debts are paid off anyway, so the whole system is broken.

I am generally very pro-business, but the idea that my credit is a secret from me, and that it hurts to check too frequently, plus it costs me money to see it more than once per agency, per year, is enough to make my blood boil.

This is really what upsets me about the whole "Credit Card" bill that went through the US Congress a few years ago. It did nothing to fix the broken system. And it leaves the door open for them to delve into your social graph to find ways to hurt you, because the entire system is designed to not help you.

Somewhat related, it wasn't until two years ago that my Mastercard gave me the ability to autopay. I've had it since before I went to college, and I had no other credit card during that time, so it's my longest card (and thus the best on my credit report). If it were not for that and the above, then I would cancel it, but it loops back around to the broken system.

The story is somewhat overblown, as the majority of people fall in the same credit score range, it's certainly not a Bell curve. So yeah, they can look into it, but most likely you'll end up with the same average score everyone else has. Beyond that, most lenders could change their credit score to 0 or 1. It's a go / no-go switch for most of them.

On the other hand, should you default on a loan, creditors release the hounds of Hell on you, and are known for contacting neighbors and relatives to get a hold of you. Giving away your social network information means they'd probably try friends and ex-lovers and God knows who else to get you to pay up.

bdsams said,
This will not fly in the US with consumer protection agencies nor with the fair debt collections act.

That was... almost adorable.

bdsams said,
This will not fly in the US with consumer protection agencies nor with the fair debt collections act.
Where's the /joke /s or any other closing tag?

If ever a bank demands that information from me, you can bet I'll be taking my business elsewhere. What my friends do with their money does not impact what I do with my money and should not reflect on my credit score at all.

dotLou said,
If ever a bank demands that information from me, you can bet I'll be taking my business elsewhere. What my friends do with their money does not impact what I do with my money and should not reflect on my credit score at all.

Agreed. This is ridiculous.

dotLou said,
If ever a bank demands that information from me, you can bet I'll be taking my business elsewhere. What my friends do with their money does not impact what I do with my money and should not reflect on my credit score at all.
Yep. Same goes for any business that asks for my Facebook or other passwords during an interview, which is apparently becoming more common.

pickypg said,
Yep. Same goes for any business that asks for my Facebook or other passwords during an interview, which is apparently becoming more common.
I plan on just playing dumb.

Bank: "Sir, we need your Facebook login to consider you for this loan."

Me: "Huh? You want my book of face? I no have such book but I have phone book you can have."

Now this is the dumbest thing I have read in a long time. Your friends change your credit score? Really? Next it will be what kind of pet you have that will change your credit score. This is stupid. As long as you are paying back your loans and whatever else, then it shouldn't matter who you are friends with. Its not like your friends affect your ability to pay.

If anyone asks me for this info, they get one of the following responses. I dont have FG/GMAIL...or Go To hell. Depends on my mood at the time. No one is going to control who I am friends with period.

techbeck said,
Now this is the dumbest thing I have read in a long time. Your friends change your credit score? Really? Next it will be what kind of pet you have that will change your credit score. This is stupid. As long as you are paying back your loans and whatever else, then it shouldn't matter who you are friends with. Its not like your friends affect your ability to pay.

If anyone asks me for this info, they get one of the following responses. I dont have FG/GMAIL...or Go To hell. Depends on my mood at the time. No one is going to control who I am friends with period.

The whole point of credit scores is not to help you, but to find ways to make you pay more in interest rates, if you have great credit they can' make money off you so they need other means to change that score to their favor.

z0phi3l said,

The whole point of credit scores is not to help you, but to find ways to make you pay more in interest rates, if you have great credit they can' make money off you so they need other means to change that score to their favor.

Huh? They don't need to change your score in order to charge higher interest. They can do that regardless of your score. They just don't do it because anyone with good credit can easily find another bank with reasonable rates.