How Lenders Are Using Social Media

February 13, 2013 in Daily Bulletin

The Economist took a look at the technologies that banks are currently using, and might start using, to analyze your social media profile for clues about your likelihood of default:

  • One startup validates your employer based on the number and nature of connections you have on LinkedIn.
  • Another uses text analysis to determine your credit risk. Those who type entirely in upper or lower case are more likely to default.
  • Experts are also looking to see if posting racist comments on Facebook correlates with higher credit risk.
  • A lender in Hong Kong asks friends to vouch for your trustworthiness as a borrower. If you fail to pay back your loan, then your own credit history, as well as those of the friends who recommended you, is hurt.

Read more about the other ways that banks could start using social media to learn about you, the privacy concerns that this raises, and how users are getting around it over here.

Source: The Economist