Be careful what you post on your social media accounts! According to a report released by the Financial Times, many of the top credit rating companies are now using people’s social media accounts to assess their ability to repay debt.
Will Lansing, chief executive at FICO, told the Financial Times, “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. It’s not much, but it’s more than zero.”
Using non-traditional sources of information such as social media allows credit companies to view more about a person who does not have an in-depth credit history. Lansing also said that FICO is “increasingly looking at data on a spectrum” to come to a decision about a person’s credit worthiness. They see credit card repayment history being the most important factor on one end of the spectrum and information volunteered by the individual on social media on the other end of the spectrum.
Not only are creditors beginning to look into social media, but they are also paying close attention to things such as a person’s payment history on phone bills, utility bills and even movie rentals. Creditors will notice that if a person has moved several times in a short time period that they may have had trouble paying their rent.
John Wehmann, executive vice-president for scores at FICO said, “We can now score the previously un-scorable.”
While this additional look into a person’s life can be great news for someone with a positive digital footprint looking to obtain a loan, it can be detrimental to those previously “un-scorable” people. Before you post on your social media accounts, be aware that what you write is a permanent piece to your digital profile and carefully consider what the outcome may be.Credit