Several companies are using social media interactions to determine whether loan applicants are creditworthy. (REUTERS)
The Atlanta Journal-Constitution
If your Facebook friend doesn’t “like” paying his or her bills on time, you might want to seek another friendship before applying for a loan.
CNNMoney reports several tech startups have found ways to determine the creditworthiness of loan seekers by looking at how much they interact with friends who have bad credit.
In essence, if you are friends with people who have bad credit and interact with them often, you could be deemed a high credit risk and denied a loan. Conversely, if you are friends with someone whose credit is solid, that could help you land a loan.
Lenddo co-founder and CEO Jeff Stewart told CNNMoney his tech company is able to use “massive computing power” to determine whether you are friends with some who’s behind on payments to Lenddo.
Kreditech, a data scoring company, says it uses massive amounts of data and complex algorithms to predict how creditworthy you are based on up to 8000 data points, such as social media activity, e-commerce purchases, and even your GPS locations.
“Kreditech can determine your location and considers creditworthiness based upon whether your computer is located where you said you live or work,” the report said.
Are lenders going too far in looking at your social media accounts to determine your creditworthiness?