This news story sounds almost Onionesque, but it’s apparently for real. It describes companies using the credit ratings of your social media connections to help determine your credit rating.
Wouldn’t that be massively invasive and illegal?
Who cares what a couple of “tech startups” are doing? Whatever TransUnion and Equifax are doing is what actually affects people.
Credit agencies draw their information from a wide variety of sources, including quite a few that are not as straightfoward as your Visa issuer. I guarantee that they are looking at this channel, if not already sampling it (and working on lobbying its legality).
In other news, Acxiom has opened a consumer-oriented web portal to show how utterly insignificant and benign they are. Anyone will be able to look themselves up and get about the same info as WhitePages, PeopleFinder etc. See? Benign. Move along, nothing more to see.
Making accurate credit decisions is arguably one of most important elements of a successful capitalist economy. If the science behind the technology proves to be effective it’s not going to be limited to the startups.
I didn’t understand the impact of credit until this post. Thank you for this information.
Who is using Kreditech or Lenddo to gather credit information? No one? And serious question: How can a reporting agency know your friends’ credit histories? Per the article:
Oh, so it looks like the information they can gather about your friends is based on their lending relationship. I wonder if any of my friends has screwed over Lenddo. Oh, no, because nobody knows who the hell Lenddo is. I’m being pretty flip about this because while I do find the concept to be pretty shitty, I don’t see the practice of using your friends’ credit to determine yours bleeding into legitimate credit reporting agencies. I do see them using your social media habits within the coming decade. Your likes and Tweets will be analyzed by a giant machine and your auto loan will be turned down because you liked too many shitty action movies and Natty Ice.
Does this mean those of us with no social media presence now have a credit score of zero? 'Cause if so, I’m gonna be pissed.
I understand your snark and disdain. It’s not like the large credit checking companies would actually use any of these procedures that look at your online social matrix if it proves to increase credit checking accuracy. They would never do that!
Gah, you changed the post I responded to sometime between when I read it and actually clicked respond from, if I’m not mistaken, some version of “Credit is important” to “Credit is important, and if the little guys make a shady process that proves accurate, the big guys will follow.”
That distinction is worthwhile, but my meh stays where it is. I already know reporting agencies are willing to go beyond conventional methods to determine creditworthiness, so considering your behaviors on social media doesn’t seem *entirely *far-fetched, but TransUnion is not going to start pulling unauthorized credit reports on your friends and basing your score on that. IF, capital I-F, real reporting agencies (not Kreditech, or whoever) are going to factor in social media, after verifying that you’re the Bob Jones they’re looking for, it would be based on your habits and not on the credit history of your friends that they somehow know.
Yeah, I can’t see how the credit/spending habits of people I know would be a very reliable indicator if MY credit-worthiness. I interact with people based on common interests, none of which revolve around money – I don’t have any idea how credit-worthy my FB friends are because we don’t talk about money management and it’s not a determining factor in whether I interact with them. I’m sure I’ve interacted with people, both online and IRL, who are bad with money (I’m related to some of them), but that doesn’t speak to how well I manage MY money.
I hope the NSA is taking notes.
Searching public websites and gathering information available publicly?
How could that be illegal? It’s what all of us do all day.
It isn’t really news. I had the opportunity to be exposed to retail fraud systems a number of years ago. If you place an order online, the fraud system has the capability to check through your known associates. It can give you a likely fraud score based off that, as well as a number of other factors (like your credit score, employment status, address), if your potential fraud score is too high, your order is kicked over for manual processing - and might be cancelled upon review. You won’t have much of a business relationship with Amazon if many of your friends are felons - even if you don’t have a record. That’s just moving into credit.
But, but, but… It might affect me negatively!!!
Who’s posting their credit score to Facebook? I mean, I’m sure there are a few idiots out there who do so, but nowhere near enough to draw any reasonable conclusions about the average credit score of a person’s FB friends.
No one in my circles are posting specific dollar amounts of their debts, anyway. I’d be surprised if all that many people were.
And this, boys and girls, is why you do not give a “social network” service your real name.
They wouldn’t be getting credit scores from Facebook, they are probably using your friends names and locations to come up with a good guess on who they are and then looking up their credit history. Too many deadbeat Facebook “friends” means no credit for you, or less favorable terms.
Uh, last I checked, running a credit check on anyone required their permission under the Fair Credit Reporting Act. They can’t just “guess” at who your friends are and pull a credit record which may or may not actually belong to your friend. It’s illegal, and credit history is considered private information, not public, legally speaking.
The ONLY exception is a “soft” pull for pre-approved credit offers. NOT to check creditworthiness for a loan, as indicated in the OP.
I don’t have a facebook account, so people who do: is it pretty common to post under your real name? I’d guess less than 10% of the people I follow on twitter and/or follow me do, so if they can pull up a credit score for UnicornSyrup, SapphoAndGrits, Purpell_Nurpell, or GodDammitDanny, I’d be super-impressed.
And this is what makes me skeptical of the supposedly newfangled “social media background check” concept. I’m thinking that in many cases where a person is undergoing such a check, the person has been asked to sign an authorization form where they are supposed to list their social media accounts and the actual background check consists of a review of those accounts, not an active investigation to discover whether or not a person has ever posted on a social media site, and if so, under what usernames, and finally, a review of those accounts.
If I just had a vague “I authorize you to do a background check on me, signed John William Smith”, I sure as hell wouldn’t rely on stumbling on an online profile (found using a search engine request for “John Smith”) named “JohnWSmith” that lists location as “private” and interests as “getting wasted”, “racking up debt”, “filing bankruptcy”, and “My Little Pony”, and nothing else. That could be anyone, like his second cousin John Walter Smith, Jr., or a lady who gets a kick out of using a male alias online.
One thing that appears on many background check authorization forms is a question as to whether or not you have changed your name, and if so, please put your former name or names here. It’s as if they are just plugging those names into a search box and reporting the results, not actually checking your background to see if you have changed your name.