Tech startups are starting to use things like social network pages and friends to determine the risk of lending money to people.
While social media has been used to screen job candidates, now things like Facebook pages and friends could change your credit score. Tech startups are beginninhg to use social data to determine the risk of lending money to people.
Lenddo bases whether you’re trustworthy or not on the credibility of your Facebook friends. If you frequently post messages to someone who was late paying back a loan to Lenddo, they are unlikely to approve your request.
Kreditech uses up to 8,000 data points when assessing an application for a loan, including information from Facebook, eBay and Amazon accounts. The company also monitors how customers fill out the online form, so if you spend time carefully reading through the information your chances will improve. CNN Money reports that:
Some in the financial industry are skeptical about social data and online behavior being used as a kind of credit score. John Ulzheimer, a credit expert at CreditSesame.com, says social data aren’t necessarily indicative of whether the borrower will pay back a loan on time.