What you post on social media could now effect your credit score
#1
Administrator
Thread Starter
What you post on social media could now effect your credit score
http://www.ajc.com/news/news/nationa...-credit/npD9X/
Many people are guilty of over-sharing on Facebook -- whether they realize it or not -- and the potential consequences of what people post on social media are getting even worse.
There once was a time when the only thing at stake was your reputation, but those days are long gone. Most people are well aware of the potential risks of social media these days, and it's no secret that a Facebook post can get you fired from a job or prevent you from getting a job in the future.
But your Facebook profile now poses a new threat -- to your credit score.
According to a report by the Financial Times, some of the top credit rating companies are now using people's social media accounts to assess their ability to repay debt. So if you want to be able to qualify for a loan and borrow money, this is just another reason to avoid saying certain things on Facebook.
“If you look at how many times a person says ‘wasted’ in their profile, it has some value in predicting whether they’re going to repay their debt,” Will Lansing, chief executive at credit rating company FICO, told the FT. "It's not much, but it's more than zero."
Lansing said FICO is working with credit card companies to use several different methods for deciding what size loans people can handle, and using non-traditional sources like social media allows them to collect information on people who don't have an in-depth credit history. According to the FT, both FICO and TransUnion have had to find alternative ways to assess people who don't have a traditional credit profile -- including people who haven't borrowed enough to give creditors an idea of what kind of risk they pose.
According to Lansing, FICO is "increasingly looking at data on a spectrum" to determine an individual's credit-worthiness -- with credit card repayment history being the most important factor on one end and information volunteered via social media on the other end.
And social media isn't the only alternative source factoring in to people's credit-worthiness. Credit rating companies are also using individuals' payment history on phone bills, utility bills and even movie rentals. One good sign to creditors is if someone hasn't moved a lot -- which could suggest they've had problems paying rent.
“We can now score the previously un-scoreable,” said Jim Wehmann, executive vice-president for scores at FICO.
And while this may be a great way for more people to get access to loans, it's also a wake-up call for those "previously un-scoreable" people to clean up their digital footprint -- and fast.
There once was a time when the only thing at stake was your reputation, but those days are long gone. Most people are well aware of the potential risks of social media these days, and it's no secret that a Facebook post can get you fired from a job or prevent you from getting a job in the future.
But your Facebook profile now poses a new threat -- to your credit score.
According to a report by the Financial Times, some of the top credit rating companies are now using people's social media accounts to assess their ability to repay debt. So if you want to be able to qualify for a loan and borrow money, this is just another reason to avoid saying certain things on Facebook.
“If you look at how many times a person says ‘wasted’ in their profile, it has some value in predicting whether they’re going to repay their debt,” Will Lansing, chief executive at credit rating company FICO, told the FT. "It's not much, but it's more than zero."
Lansing said FICO is working with credit card companies to use several different methods for deciding what size loans people can handle, and using non-traditional sources like social media allows them to collect information on people who don't have an in-depth credit history. According to the FT, both FICO and TransUnion have had to find alternative ways to assess people who don't have a traditional credit profile -- including people who haven't borrowed enough to give creditors an idea of what kind of risk they pose.
According to Lansing, FICO is "increasingly looking at data on a spectrum" to determine an individual's credit-worthiness -- with credit card repayment history being the most important factor on one end and information volunteered via social media on the other end.
And social media isn't the only alternative source factoring in to people's credit-worthiness. Credit rating companies are also using individuals' payment history on phone bills, utility bills and even movie rentals. One good sign to creditors is if someone hasn't moved a lot -- which could suggest they've had problems paying rent.
“We can now score the previously un-scoreable,” said Jim Wehmann, executive vice-president for scores at FICO.
And while this may be a great way for more people to get access to loans, it's also a wake-up call for those "previously un-scoreable" people to clean up their digital footprint -- and fast.
#3
Moderator
Misleading! Your "credit score" will not ever change just from saying a few things on Facebook. Your score is based on a numerical calculation from the payment data your creditors provide.
The only way Facebook will affect your loan approval is if the underwriter manually checks your facebook account and sees something negative. That's a completely separate method of approval than using your credit score.
The only way Facebook will affect your loan approval is if the underwriter manually checks your facebook account and sees something negative. That's a completely separate method of approval than using your credit score.
#4
Super Moderator
If you read the article, it says that FICO (the company that generates your credit score) is going to begin looking at social media (not just lenders). This tells me that they do plan to use it to affect your actual score.
#5
Moderator
In this case, FICO would probably come out with something called "FICO Social" so they can sell it to lenders to show what you're doing on the internet. It would NOT mix with your standard FICO 08 credit score. And I do not see lenders buying this extra service based on a person's social media history.
Everyone gets scared when crap like this happens with lenders and credit scores. Like you're powerless. But guess what, you can do business with any lender you want. You also have the right to ask them about how they got their scoring. Which report they used and what scoring system they used. So, if you don't like them basing their decision on your "social media score", then don't do business with them. Personally, I only do business with small credit unions. They don't do stupid sh*t like this and grant just the same credit lines and rewards.
#6
Super Moderator
You probably missed this part...
I know a bit.
#7
Moderator
Yup, and I was replying to this.
You don't have a score with FICO. You have dozens of scores with FICO. And it will never change the score that most lenders use, which is their 04 and 08 system. Even now, more and more lenders are starting to go to the Vantage scoring system which isn't FICO at all. So who cares is FICO starts looking at your social media?
You don't have a score with FICO. You have dozens of scores with FICO. And it will never change the score that most lenders use, which is their 04 and 08 system. Even now, more and more lenders are starting to go to the Vantage scoring system which isn't FICO at all. So who cares is FICO starts looking at your social media?