Comments Subscribe to Personal Liberty News Feed Subscribe to Personal Liberty
 

Facebook Presence, Habits Could Affect Your Creditworthiness

August 27, 2013 by  

Facebook Presence, Habits Could Affect Your Creditworthiness
PHOTOS.COM

As social media continues to supplant real living for more people who’ve embraced technology’s offer of an always-on existence, real-world repercussions of laying one’s persona before the public often come along in unexpected ways.

One side effect of America’s turn toward technocracy is the fact that the rest of the digital world is slowly beginning to view a person’s online presence (or lack thereof) as an indicator of his creditworthiness.

The relatively new phenomenon of lenders using Facebook to reach an up-front decision about whether you’re likely to pay back a loan is, for now, confined to that segment of would-be borrowers who lack established credit but who remain highly engaged in social media.

According to a CNN Money report, people who’ve left no footprint with FICO and other credit scoring analysts are increasingly being scrutinized by companies that use Facebook to determine, based on individuals’ social associations and online interests, whether they represent a safe credit risk.

How does it work? Companies like Lenddo find out whether you’re Facebook friends with others who have previously taken out a loan from the company, which bills its business model as “credit based on trust.” If one or more of your Facebook friends hasn’t been timely with loan repayments, it lowers your chances of getting a loan from Lenddo. But if your associates have been timely, your chances of approval increase.

“It turns out humans are really good at knowing who is trustworthy and reliable in their community,” Lenddo CEO Jeff Stewart told CNN Money. “What’s new is that we’re now able to measure through massive computing power.”

It’s not just a person’s Facebook habits that can make or break the technocracy’s judgment of their financial trustworthiness. Small-business cash-advance outfits like Kabbage augment an applicant’s traditional credit score with information mined from Big Data, including applicants’ payment histories through online exchanges like PayPal and eBay.

Most of the companies that have so far turned to the Internet to assess individuals’ credit risks aren’t operating extensively in the United States. But just as the Internet has insinuated itself into many employers’ hiring practices, online-based credit “checks” that examine a person’s habits, preferences and associations are expected to become more common.

The practice is still too new to forecast the fates of those Internet users who have no plans to join Facebook or establish a history of online commerce by buying things off Amazon or eBay. But precedent suggests that those who choose to live free from the tether of technology-based social relationships and financial transactions could face undue burdens as their world comes into contact with that of the majority — a majority that grows increasingly contented with swapping virtual life for real life.

Ben Bullard

Reconciling the concept of individual sovereignty with conscientious participation in the modern American political process is a continuing preoccupation for staff writer Ben Bullard. A former community newspaper writer, Bullard has closely observed the manner in which well-meaning small-town politicians and policy makers often accept, unthinkingly, their increasingly marginal role in shaping the quality of their own lives, as well as those of the people whom they serve. He argues that American public policy is plagued by inscrutable and corrupt motives on a national scale, a fundamental problem which individuals, families and communities must strive to solve. This, he argues, can be achieved only as Americans rediscover the principal role each citizen plays in enriching the welfare of our Republic.

Facebook Conversations

Join the Discussion:
View Comments to “Facebook Presence, Habits Could Affect Your Creditworthiness”

Comment Policy: We encourage an open discussion with a wide range of viewpoints, even extreme ones, but we will not tolerate racism, profanity or slanderous comments toward the author(s) or comment participants. Make your case passionately, but civilly. Please don't stoop to name calling. We use filters for spam protection. If your comment does not appear, it is likely because it violates the above policy or contains links or language typical of spam. We reserve the right to remove comments at our discretion.

Is there news related to personal liberty happening in your area? Contact us at newstips@personalliberty.com

Bottom
close[X]

Sign Up For Personal Liberty Digest™!

PL Badge

Welcome to PersonalLiberty.com,
America's #1 Source for Libertarian News!

To join our group of freedom-loving individuals and to get alerts as well as late-breaking conservative news from Personal Liberty Digest™...

Privacy PolicyYou can opt out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.