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Should Social Media Affect Your Creditworthiness? 344

theodp writes "Betabeat's Adrianne Jeffries takes a look at the questionable young science of using social media to evaluate creditworthiness. As banks start nosing around Facebook and Twitter, Jeffries explains, the wrong friends might just sink your credit. 'Let's take a trip with the Ghost of Christmas Future,' she suggests. 'The year is 2016, and George Bailey, a former banker, now a part-time consultant, is looking for a 30-year fixed-rate mortgage for a co-op in the super-hot neighborhood of Bedford Falls (BeFa). He has never missed a loan payment and has zero credit card debt. He submits his information to the online-only, but halfway through the application process, the website asks for his Facebook login. Then his Twitter. Then LinkedIn. The cartoon loan officer avatar begins to frown as the algorithm discovers Mr. Bailey's taxi-driving buddy Ernie was once turned down by PotterBank for a loan; then it starts browsing his daughter Zuzu's photo album, 'Saturday Nite!' And what was this tweet from a few years back: "FML, about to jump off a goddamn bridge"?' So, could George piggyback his way to a better credit score by adding Larry and Sergey to his Google+ Circles?"
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Should Social Media Affect Your Creditworthiness?

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  • by ard ( 115977 ) on Thursday December 15, 2011 @09:28AM (#38382108)

    The company iZettle, which provides "personal payment" via credit cards (chip reader that plugs into phone+app),
    requires not only traditional autentication and a bank account - but also your facebook profile with an established social network. I.e. you must have friends as a voucher for your identity.

    No facebook, no service. True, they dont base credit reports on your profile, but I find it a disturbing development where traditional identification and bank account are not enough (especially here in Sweden where we already are tracked since birth with the personnummer supercookie).

  • by LateArthurDent ( 1403947 ) on Thursday December 15, 2011 @10:33AM (#38382720)

    First, Banks don't investigate you, they just check with the Credit Agency.

    Never got a mortgage, have you? Well, I recently bought my first house.

    Banks check with the credit agency for the prequalification process. After that they require you to submit a record of all your bank accounts and all of your bills. They call your landlord, then they call your employer, and not just for a generic "is he really employed there?" call, but also to grill your boss about what the chances are that you're going to get fired in the next 1-2 years. When I got my mortgage, they had my boss fax them three different statements regarding my employment over the course of one day. One of these was to confirm that I had indeed gotten a raise in the middle of the year, because they had done the math on my pay stubs and decided that the year-to-date earnings didn't match the twice a month salary showing on the stub for the last two months. The difference for the whole year would have been less than $3,000 due to when I got the raise. I could have easily qualified with my pre-raise salary.

    In fact, I had a 820 credit score, no debt (but plenty of credit history), and enough money in investment accounts that I could have bought the house outright (inheritance from grandparents). I just wanted to take opportunity of the incredibly low interest rates these days. I shudder to think what the process is like for somebody who actually needs the loan.

  • by s4ndm4n ( 1361751 ) on Thursday December 15, 2011 @11:08AM (#38383132)
    This is rather curious. Being someone that has been one of the ones that actually needed a loan at one time, my process other than it being nerve racking, since my credit score was below what they would have liked it at, was relatively simple and I had no experience nearly as detailed and crazy as yours. They simply needed my employment status, wages and such and verification of that from pay stubs and that was that. That is a really weird situation, I wonder why that particular bank was scrutinizing you so closely. In any case your experience, I don't think, is the norm.
  • by jedidiah ( 1196 ) on Thursday December 15, 2011 @11:41AM (#38383612) Homepage

    No. Banks have simply gotten more careful since the recent mortgage industry meltdown. This kind of 3rd degree used to be commonplace. Most people aren't aware of it here simply because they are too young and inexperienced. They haven't been in the mortgage market very long if at all.

    This kind of grilling by bankers was pretty common back when they actually cared about you paying back the loan.

Each honest calling, each walk of life, has its own elite, its own aristocracy based on excellence of performance. -- James Bryant Conant