Facebook friends could change credit score
A new trend – lenders would be giving loans not just on your credit score but also on the kind of friends you have on Facebook. Simply put, if you have friends that show irresponsible behavior financially you may not get the loan that you are asking for. Your friend might be in deep debt buying the numerous Coach purses or Burberry jackets –this financially unsound decision of him/her would impact you directly. Financial companies will be assessing not just your credit worthiness but also the financial status of your friends to draw a whole picture of you. We always knew that a person is often judged by the company he keeps but to think his loan for the car or house could be disapproved because he interacts with a financially irresponsible person on Facebook – well that’s going to be the new trend of this ever changing digital world.
CNN reports One such company, Lenddo, determines if you’re friends on Facebook (FB) with someone who was late paying back a loan to Lenddo. If so, that’s bad news for you. It’s even worse news if the delinquent friend is someone you frequently interact with.
“It turns out humans are really good at knowing who is trustworthy and reliable in their community,” said Jeff Stewart, a co-founder and CEO of Lenddo. “What’s new is that we’re now able to measure through massive computing power.”
Kabbage, Lenddo and Kreditech are some companies that have already started giving or rather rejecting loans based on your social circle. All these companies are online financing companies. They do not operate like a bank. They just engage in giving out loans. At this point of time most of these companies have their operations outside USA.
So while for people in USA their social circle is not being analyzed for the credit worthiness, time is not far when this will become the case here too.