Can Social Media Affect Your Credit Score

Could Social Networks Hurt Your Credit Score?No, as of now, your social media activity would not affect your credit score. However, it may impact the same in the near future. You have even tweeted that you have run out of cash and will soon require a personal loan to support your lifestyle." You will be flabbergasted to find out how your creditworthiness was based on innocent and fun comments you posted on social networking sites.

A couple of months back, one of the leading news vehicles reported that the credit reporting agencies are testing the integration of social media into the financial process in order to source information about an individual’s creditworthiness and also establish his online identity. This means that even the harmless information you upload, can work against you in the complicated calculations of your credit score.

Imagine someone rummaging through your social networking history including those of your friends. However, in the near future, whether it’s your Facebook, Twitter, or personal blogs, every word you may have said taking the liberty of it being your ‘personal profile’ could be thoroughly scrutinized to draw inferences about your creditworthiness and to judge your personality. Let us explore a few more points regarding social media activity affecting credit score.

Essential for Effective Risk Management

People, who are in favor of social media activity affecting credit score claim that it can be treated as an effective medium to gain access to the type of personality of an individual, his identity, and creditworthiness. They also say that banks and creditors can manage the risk of lending money effectively, if they know the complete details about the person.

Research Under Progress

If you thought that by only paying your bills on time, you will be able to maintain a healthy credit score, then you are completely wrong. In a press release, Equifax stated that they are exploring the possibility of clubbing unstructured data (along with data from the social media) with structured, attributable data in order to develop analytical models that will help to assess the risks in better way and verify the person’s identity. This means that any time in the near future slowly but surely your social networking profiles will provide a basis for your creditworthiness.

Are Banks and Creditors Already Doing This?

It is said that some banks are trying to tap into your personal social media information in order to decide your creditworthiness and determine your credit risk. Lenddo, a Hong Kong based microlending company, states that it is the first credit scoring service, which utilizes your online social network to assess your credit. It asks for access to your Facebook, Gmail, Twitter, Yahoo, and Windows Live accounts. In a strange twist, if you fail to repay, your loan status will be notified to your family, friends, and community. Also, it will affect yours and your friend’s Lenddo score.

Profiles for Profit

In the year 2012, The Federal Trade Commission (FTC) fined Spokeo, Inc. a data mining firm for $800,000 in civil penalties for compiling social media databases on millions of people. It used this information to sell it to background screeners, recruiters and HR managers without ensuring the accuracy of the data, or even informing the individuals that their details were getting used. Many data mining agencies earn a lot by investigating their clients without verifying the authenticity of the information. In an industry, where there is already so much of inaccuracy, it will be very difficult to maintain accuracy of the credit score generated by integrating information from social media, as well. A person may tweet that he is on the verge of insolvency, out of sheer fun. Taking it seriously, and making this work against the person’s credit may not be correct.

Integrating Social Media in Credit Scores

Imagine how difficult it would be to quantify and incorporate your social media behavior. For example, you may have updated a Facebook status about being cashless at the end of the month. On what parameters will this piece of information be integrated into your credit score? You may have updated this status after setting aside your savings for the month. However, you might not have had enough cash to spend until you receive your next salary. This does not mean that you do not have the capacity to repay. It will be very difficult to take all these things into consideration. It may also lead to interpreting your social media activities literally, rather than in its true form.

Legal Issues

Resorting to involvement of non traditional and unstructured data may create trouble with the Fair Credit Reporting Act (FCRA). Every individual has a right to see his/her credit report, whether it is being used in a negative manner or not. He can also go further to understand when and why a certain determination was made against him. This is known as notice provision. Many companies, who were using background check applications which violated FCRA’s notice provision about personal and credit related data have received warnings from the FTC. Apart from this, there will be several other legal issues related to privacy. It is very easy to numerically calculate structured data. However, it is not possible to count unstructured data in terms of numbers. For example, updating your status on your Facebook account saying that you had 10 donuts may be structured data. However, if you post a status saying that you went to a donut outlet, or tried making donuts at home, then it may be unstructured data. It further raises several questions. Does it mean that if you are liking the pages of expensive sports cars and designer wear, you are filthy rich? And if you have moderate choices, does it imply that you are not well off? In order to first integrate both these data together and then with your credit score, a smart and foolproof calculation or algorithm will be required. Otherwise, there will be too many inaccuracies and errors.

michael kors outlet uk
longchamp outlet
michael kors outlet uk
cheap moncler
moncler outlet uk
the north face outlet
ray ban outlet uk


🔴مواضيع متداولة الآن :


0 التعليقات:

إرسال تعليق

برودكاست برودكاست فيديو برودكاست صور برودكاست جديد broadcast MBC PRO SPORTS , كيف تحمل من اليوتيوب , how download from youtube , convert youtube to mp3 , تحميل tubemate , تحميل snaptube , ديكور المنزل , ديكور غرف نوم , غرف نوم اطفال , ديكور حديقة منزلية