What does credit scoring have to do with your Facebook Friends?
To improve your credit scoring, you are going to have to choose your Facebook Friends more wisely. Many people believe that when it comes to social media, it’s a numbers game and whoever has the most, wins. As a result they will “friend” anyone who asks. They don’t care who they are or why they want to be Facebook friends; the only thing that matters is that their number of friends keeps going up. That may now be a very dangerous game to play. Those Facebook friends that you’ve been amassing may be a liability if you apply for a loan.
It’s well known that Facebook mines data from its users for the purposes of pushing targeted advertising. However, Facebook now has a patent for authorizing and authenticating a user based on their social network on Facebook. Although this patent can be used for several benign functions like helping with search queries, it also states very clearly that it could be used to approve a loan based on a user’s social connections. In other words, the new Facebook algorithm can be used by lenders in determining your credit scoring when applying for a loan or mortgage.
The Facebook credit rating patent
“When an individual applies for a loan, the lender examines the credit ratings of members of the individual’s social network who are connected to the individual through authorized nodes,” the patent reads. “If the average credit rating of these members is at least a minimum credit score, the lender continues to process the loan application. Otherwise, the loan application is rejected.” So your Facebook Friends credit scoring, affects yours too!
Lenders are already using social media when considering your loan application
In case you find this shocking and futuristic, social media strategist and University of Sydney academic Laurel Papworth says that lenders in 36 countries are now using Facebook data as part of their tools for approving or rejecting loan applications. This puts a lot of power in the hands of your Facebook friends, especially when you consider that according to CNN there are 83 million fake profiles.
So do you really know your entire list of Facebook friends well and better yet, their financial situation and credit scoring? It’s time to take a serious look at your Facebook friends and start trimming the fat. Who you don’t actually know, and who you do know with poor credit scoring, can hurt you.
If you have been rejected for a loan – take action now!
If you have been rejected for a loan application because of a poor credit scoring, chances are that you are in a financial danger zone. The best thing you can do is contact a professional trustee as soon as possible. The Ira Smith team is here to help you conquer debt and live a financially healthy life Starting Over, Starting Now.