SCHUFA, Germany’s version of FICO proposed an idea recently to use
Facebook as a place to gather information about credit applicants to
determine their credit status. The concept was defeated in Germany, but
many Germans fear that the plan will not stay gone for long. However
novel and wonderful the plan, consumers will be hurt in the future.
What is the new fascination with social networking and credit scores? Lenddo, the Philippines lender, was recently in the news for using social networking sites such as Twitter and Facebook to grant Filipino students loan money for books and other educational expenses. According to Lenddo administrators, the average loan amount given to an individual is $600. Lenddo is an example of a loan company that uses social networking to good ends; however, not all banks and retail stores are doing this. Many are using your online information as a way to prevent you from being approved for a loan for which you qualify. In other words, what seems to be an excellent idea for credit turns out to be a bigger disqualification than some would believe.
How can your Facebook activity hurt you? Imagine what would happen if a retail store or a bank examined your Facebook for credit. Since your connections of family and friends play a role in your credit score when it comes to social networking, you may have a notorious family member (someone who has a criminal record) and may be denied on the basis of your relative’s criminal record. What if one of your friends decides to “talk smack” about the bank from which you want to obtain credit? If the bank sees your friend’s comment, and may see that you “like” the comment, you may lose the opportunity to obtain credit from the bank.
You may “like” the notorious comment for different reasons: it may be funny, or you may “like” it in disbelief that someone would say it; it may make you speechless, or you may just “like” the comment because “she’s crazy,” you think to yourself. No one can understand why you “like” the comment because there is no reason or justification placed on the comment or the individual’s Facebook wall. Nevertheless, if banks, retail stores, mortgage lenders, etc., are given access to social networks, you could have fewer chances of obtaining credit than before.
Have you ever considered the possibility that your credit score could be lowered significantly because of something that others say about you? That is the word from Digital Trends in their article titled “Tweet Lightly: How Social Media Could Affect Your Credit Score, Insurance, and More.” The article states that, while we cannot affect statements that are said behind our backs by others, we could be hurt in the long-term by dishonest remarks.
How much of a phenomenon is this trend becoming? One that is large enough to stay. Retail stores, banks, mortgage lenders, and others have started to use social networking for not only credit scores, but also for jobs (hence, a connection between credit scores and occupations, a point I made well in a recent post. There are many jobs today that will not even consider an applicant for work if he or she does not possess a Facebook, LinkedIn, Twitter, or Pinterest account. This is becoming the case online for jobs at job sites such as ODesk.com. If this is the case with jobs in general, the connection between social networking and credit scores is not far behind.
The reason for the connection between social networking and credit is simple: credit scores provide a recent (though not up-to-the-minute) assessment of a person’s likelihood not to default on a bank or mortgage loan; social networking sites provide an up-to-the-minute look at a person’s behavior, payments, and so on. Since individuals reveal who they are via Facebook and Twitter posts, banks and lenders are “banking” (pun intended!) upon an honest response—one they can use to deny loans to applicants.
Social network accounts and activity are valued for their ability to provide more insight into an individual’s daily life; however, social networks are no better an assessment of someone’s ability and commitment to pay than someone’s sock color is an indication of an individual’s company fidelity. Unless your Facebook “friends” intend to secure you the money to pay back those loans when you find yourself in a tight spot, they provide no sense of security for lenders and companies with regard to a loan. In the same way, they have no bearing on an individual’s personality and character. Most days, we all have a relative or friend we want to trade.
Get more information about credit monitoring, credit monitoring service, credit score monitoring, credit reports Please CLICK HERE
Source: http://www.bestcreditreports.com/blog/
What is the new fascination with social networking and credit scores? Lenddo, the Philippines lender, was recently in the news for using social networking sites such as Twitter and Facebook to grant Filipino students loan money for books and other educational expenses. According to Lenddo administrators, the average loan amount given to an individual is $600. Lenddo is an example of a loan company that uses social networking to good ends; however, not all banks and retail stores are doing this. Many are using your online information as a way to prevent you from being approved for a loan for which you qualify. In other words, what seems to be an excellent idea for credit turns out to be a bigger disqualification than some would believe.
How can your Facebook activity hurt you? Imagine what would happen if a retail store or a bank examined your Facebook for credit. Since your connections of family and friends play a role in your credit score when it comes to social networking, you may have a notorious family member (someone who has a criminal record) and may be denied on the basis of your relative’s criminal record. What if one of your friends decides to “talk smack” about the bank from which you want to obtain credit? If the bank sees your friend’s comment, and may see that you “like” the comment, you may lose the opportunity to obtain credit from the bank.
You may “like” the notorious comment for different reasons: it may be funny, or you may “like” it in disbelief that someone would say it; it may make you speechless, or you may just “like” the comment because “she’s crazy,” you think to yourself. No one can understand why you “like” the comment because there is no reason or justification placed on the comment or the individual’s Facebook wall. Nevertheless, if banks, retail stores, mortgage lenders, etc., are given access to social networks, you could have fewer chances of obtaining credit than before.
Have you ever considered the possibility that your credit score could be lowered significantly because of something that others say about you? That is the word from Digital Trends in their article titled “Tweet Lightly: How Social Media Could Affect Your Credit Score, Insurance, and More.” The article states that, while we cannot affect statements that are said behind our backs by others, we could be hurt in the long-term by dishonest remarks.
How much of a phenomenon is this trend becoming? One that is large enough to stay. Retail stores, banks, mortgage lenders, and others have started to use social networking for not only credit scores, but also for jobs (hence, a connection between credit scores and occupations, a point I made well in a recent post. There are many jobs today that will not even consider an applicant for work if he or she does not possess a Facebook, LinkedIn, Twitter, or Pinterest account. This is becoming the case online for jobs at job sites such as ODesk.com. If this is the case with jobs in general, the connection between social networking and credit scores is not far behind.
The reason for the connection between social networking and credit is simple: credit scores provide a recent (though not up-to-the-minute) assessment of a person’s likelihood not to default on a bank or mortgage loan; social networking sites provide an up-to-the-minute look at a person’s behavior, payments, and so on. Since individuals reveal who they are via Facebook and Twitter posts, banks and lenders are “banking” (pun intended!) upon an honest response—one they can use to deny loans to applicants.
Social network accounts and activity are valued for their ability to provide more insight into an individual’s daily life; however, social networks are no better an assessment of someone’s ability and commitment to pay than someone’s sock color is an indication of an individual’s company fidelity. Unless your Facebook “friends” intend to secure you the money to pay back those loans when you find yourself in a tight spot, they provide no sense of security for lenders and companies with regard to a loan. In the same way, they have no bearing on an individual’s personality and character. Most days, we all have a relative or friend we want to trade.
Get more information about credit monitoring, credit monitoring service, credit score monitoring, credit reports Please CLICK HERE
Source: http://www.bestcreditreports.com/blog/
