Would Your Facebook Friends Loan You Money? Online Lenders Want to Know

Your News Companion by Ben Mathis-Lilley
Aug. 26 2013 6:57 PM

Time to Defriend? How Your Facebook Friends Could Determine Your Credit.

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A dog stands in front of a computer screen with a facebook page opened on it.

Photo by DENIS CHARLET/AFP/Getty Images

Your Facebook friends may be an indication of online social status, but, apparently, your friend network can also determine whether it’s a good idea to lend you money. Enter the growing number of lending companies that are using your social networking to assign you a credit score.

Here’s how it works, says CNN: one of these companies scours your Facebook friends and if you’re online buds with someone who’s late paying back a loan, then your credit score is taking a hit. If it’s someone you interact with a lot who’s delinquent, that means even more negative points.

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That may seem a bit harsh, considering every family has a crazy uncle, and even more so because your roster of Facebook friends surely includes a couple of randoms that you can’t quite remember when, or where, they snuck into your life. But, if your friends are broke, you probably are too, the thinking seems to go.

But, it’s not only your Facebook friendships that help determine whether you’re safe to lend money to. The German company, Kreditech, uses some 8,000 data points when deciding on a loan application. In addition to the crowd you run in on Facebook, here are a few, somewhat creepy, ways they assess your credit reliability, courtesy of CNN:

In addition to data from Facebook, eBay or Amazon accounts. Kreditech also gathers information from the manner in which a customer fills out the online application. For example, your chances of getting a loan improve if you spend time reading information about the loan on Kreditech's website. If you fill out the application typing in all-caps (or with no caps), you're knocked down a couple pegs in Kreditech's eyes. Kreditech can determine your location and considers creditworthiness based upon whether your computer is located where you said you live or work.

 

 

 

Elliot Hannon is a writer in Washington, D.C. Follow him on Twitter.