The company you keep online now has a bigger impact on your financial life than you ever thought possible. Yes, thats right. An increasing number of lenders today are basing their lending decisions at least in part on your friends and associates.
You ARE the Company You Keep (to Lenders)
Small lenders and startup lenders are particularly paying close attention to your Facebook friends when determining whether to give you that loan. Companies often scan your friends list to see if you have any friends who have been late paying on their own loan to that company or worse, defaulted on it. Your friends credit history with the company vetting you for a loan will play a role in whether or not you get the money. After all, if you associate with people who dont pay their loans on time, what assurance does the lender have that youll be any different?
According to small lending company Lenddo, determining who is trustworthy with money is now able to be determined through computers. Part of that determination involves a close study of your Facebook friends. The friends you interact with the most on Facebook will have the largest impact on the companys determination of your own credit worthiness.
Anything You Do Online is Potential Fodder for Loan Decisions
Its not just Facebook that lending companies are analyzing when determining whether to lend you money. Your user data from sites like eBay and Amazon may also be used. You may even be denied a loan due to your online spelling, grammar and use of caps. The correctness of your writing in terms of spelling and grammar may increase your chances of getting a loan, while filling out your loan application using all caps may count against you. Its all a matter of maturity to the lender when these factors are used to determine credit. People who write properly and refrain from using caps except on words that require a capital letter are seen to be more mature and therefore more likely to pay their loans back on time. Those whose writing style leaves something to be desired can be looked at as too immature for a loan. Dont you wish youd paid more attention in English class in high school now?
While you should still use credit monitoring services to keep track of your score and guard against identity theft incidents that could affect your ability to get a loan, also pay attention to who youre friends with online. Social media and our online interactions are beginning to play a larger role in the world. It already affects some college and job applications. Your good credit could be next.