Facebook friends could change your credit score

[petros]

NEW YORK (CNNMoney)
Choose your Facebook friends wisely; they could help you get approved -- or rejected -- for a loan.

A handful of tech startups are using social data to determine the risk of lending to people who have a difficult time accessing credit. Traditional lenders rely heavily on credit scores like FICO, which look at payments history. They typically steer clear of the millions of people who don't have credit scores.

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But some financial lending companies have found that social connections can be a good indicator of a person's creditworthiness.

One such company, Lenddo, determines if you're friends on Facebook (FB) with someone who was late paying back a loan to Lenddo. If so, that's bad news for you. It's even worse news if the delinquent friend is someone you frequently interact with.

"It turns out humans are really good at knowing who is trustworthy and reliable in their community," said Jeff Stewart, a co-founder and CEO of Lenddo. "What's new is that we're now able to measure through massive computing power."

 

[damngrumpy]

What a load of nonsense. If I know someone who has a poor credit rating I am
also a poor risk? That is like saying if someone in a family was a murderer then
the whole family should be locked up.

 

[Christianna]

I never put my real name out there anywhere. That is true of my facebook account too, so the only people on my friends list are real friends and family that know the name I use.The only reason I still have the account is it is a good place to find community news since our newspaper is useless at news, and the buy and sell. Other than that I don't really get facebook. People even put their children's pictures on it, I believe that is a huge mistake.

 

[WLDB]

People even put their children's pictures on it, I believe that is a huge mistake.

Agreed. If I had kids I would never post anything about them online. Im really glad FB didnt exist when I was a baby or child. My mother is definitely the type to post that stuff.

Whoever made this credit policy is a bit of an idiot. Realistically, is there anyone who doesnt know someone who either has or had bad credit at one time? It makes no sense.