Just in case getting shocked wasn’t enough to keep you off the site: not that you should be taking on debt (eeeeevil…) but the new trend in lending is to look at your online presence. Friends with people on Facebook who don’t pay back loans on time? That’ll hurt your chances of getting one at a good rate.
Same goes for all kinds of other indicators, including non-obvious ones like how much time you spend on the company’s website reading about the loan. Everything a company can find on you, visibly relevant or not, gets tossed into the hopper of the algorithmic meat-grinder and it picks out relations that aren’t so obvious to the eye.
I expect this will be particularly popular in some not-too-distant-future among the studant loan companies.
“Choose your Facebook friends wisely; they could help you get approved — or rejected — for a loan.
A handful of tech startups are using social data to determine the risk of lending to people who have a difficult time accessing credit. Traditional lenders rely heavily on credit scores like FICO, which look at payments history. They typically steer clear of the millions of people who don’t have credit scores.
But some financial lending companies have found that social connections can be a good indicator of a person’s creditworthiness.
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.””