Online social networks -- and e-shopping habits -- are among the clues to creditworthiness lenders can now assess
How Facebook friends could affect your credit score
Do you ever look at people's ever-growing number ofFacebook (FB -4.11%) friends or your own pile of online family and acquaintances and wonder what their purpose is?
You hear from only handfuls of them at a time, and your news feed is cluttered with folks who update far more than most of your friends. Unless you're trying to get them interested in your day-to-day minutiae or some project you're putting together, you've just been stacking those friends in a scarcely visible trophy case. Even with thousands of Facebook friends, it can get awfully quiet in the social networking world.
Maybe that's part of the reason why some credit groups are trying to raise the stakes of your "friends" lists a bit. As reported by CNNMoney, lending companies includingLenddo and Kreditech are using the credit histories of your Facebook friends to judge just how likely you are to pay your debts on time.
While traditional lenders lean more heavily on credit scores based on payment history to determine an applicant's worth as a borrower, that leaves out millions of people who don't have credit scores at all. Your Facebook friends -- whom Lenddo scans for payment and default data, which is then used to judge you by the company you keep -- are just one of the thousands of points lenders are now using to give folks without credit scores access to the credit market.
Kreditech, for example, uses up to 8,000 data points when assessing a loan application. The German company culls data from Facebook, eBay (EBAY -2.60%) and Amazon (AMZN -1.84%), clocks the amount of time people spend reading over the application on its website and judges applicants harshly if they fill out the form in all-caps or no caps. more at source