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Should Social Media Affect Your Creditworthiness?
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 PotterBank.com, 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?"
And in the EU there are data protection and privacy laws that could be used to deter this kind of thing.
At least George has Clarence as an angel investor.
Oh, yeah, it's not easy to pad these out to 120 characters.
Everybody that uses social networks have connections to somebody that gone broke, or made bad comments on the past. That fictional bank wouldn't be able to lend money. Thus wouldn't generate any revenue.
Searching social networks will probably happen on the real world, but you can bet the information the banks will gather will be way saner than that, and they won't jump to conclusion that fast.
Now, about the real problem. Why is everybody so concerned about their credit worthness?
Rethinking email
"halfway through the application process, the website asks for his Facebook login. Then his Twitter. Then LinkedIn." If any site of a supposed financial institution were to start asking for my logins for any site other than it's own, frankly I would run from that site like the plague.
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).
This isn't going to be particularly pleasant to hear, but ultimately these sorts of activities are all about finding indicators of your likeliness to default on your credit, in much the same way that indicators are used when providing insurance to evaluate someone's likelihood of needing to make a claim and price them accordingly. So having these extra indicators isn't by itself necessarily bad. It's not in the lender's interests to come up with bad indicators. To stay competitive, they have to strike a good balance between covering their ass and giving you a better rate than the next lender. So ultimately they're trying to find out something about your creditworthiness (as a probabilistic measure of default) that is more likely to be right than wrong.
The real philosophical issue is, if non-financial indicators are used to evaluate our creditworthiness, then are we being unfairly induced to make changes to our lifestyle to accomodate our need for credit?
No kidding!!! What do you say at this point?
What am I not understanding? This story seems relevant to me. If you don't agree, you are free to click on a different story.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
“There is this concept of ‘birds of a feather flock together,’” said Ken Lin, CEO of the San Francisco-based credit scoring startup Credit Karma. “If you are a profitable customer for a bank, it suggests that a lot of your friends are going to be the same credit profile. So they’ll look through the social network and see if they can identify your friends online and then maybe they send more marketing to them. That definitely exists today.”
This is about a new wave of companies trying to make inroads into the banking business. This BS story is just them peddling their wares and trying to raise some eyebrows and maybe get a bank or two to give them a serious look. You've got these companies already doing marketing for banks by digging into our social networks, and now they think they can make more money and become that much more important (legitimate?) by actually helping the banks make their credit decisions. 100% wishful thinking at this point. Let's hope it stays that way.
Better known as 318230.
They've dressed the issue up as something hypothetical, when in fact it already happens. It's just not banks that are doing it
Insurance companies are infamously snoopy and manipulative. They'll look at anything and everything they can possibly get their hands on, legal or not, to analyze your risks. I'd bet serious money that insurers already pry in social networks.
And they've managed acts of regulatory capture that would make even banks and defense contractors blush. Here in North Carolina you're not even allowed to have a driver's license unless you have car insurance. If you don't actually have a car that's tough shit; you can't even drive rentals or borrowed cars.
Facebook has "shadow accounts" of people it's datamined, but have not actually opened a facebook account with. So even if you don't have an account, your friends & family talking about you, or any data it harvests that contain references to you, are stored there.
I would suspect that Facebook's sharing of information with legal authorities includes shadow accounts, and if banks or credit reporting agencies strike a deal with Facebook to get at "indicator" information about people, they'd be able to view shadow accounts as well.
Please mod me up, I want to refinance!
org.slashdot.post.SignatureNotFoundException: ewg
What am I not understanding? This story seems relevant to me. If you don't agree, you are free to click on a different story.
Really? How is this relevant:
"He submits his information to the online-only PotterBank.com, but halfway through the application process, the website asks for his Facebook login. Then his Twitter. Then LinkedIn."
First, Banks don't investigate you, they just check with the Credit Agency.
Second, this would require a change to what is allowed to count against your credit score, credit rating companies cannot just arbitrarily pick random shit.
Next, this would require a wholesale change in the entire way our society handles private contracts. Giving the logins above would be a breech of TOS for all those sites just to start with.
Additionally, this would require a complete 180 turn in regards to the Computer Fraud and Abuse Act. Currently if someone were to login using your credentials, they would technically be in violation of the Act as it would be considered Unauthorized Access to a Computer or Network Device, which just so happens to be a Federal Felony.
And Finally, the second any of those things were done there would be a court case challenging the practice on the grounds of Right to Free Association.
So in closing, no this is not relevant, and if you insist on having it then it should be in the Idle section not on the front page.
Dear bank, sorry, I can't give you the login directly, privacy you know. But (wink, wink) you can find them - just Google for my nickname "Anonymous"...
Enjoy life! This is not a dress rehearsal.
I would suspect that Facebook's sharing of information with legal authorities includes shadow accounts, and if banks or credit reporting agencies strike a deal with Facebook to get at "indicator" information about people, they'd be able to view shadow accounts as well.
Good point. In Soviet Russia, facebook account has you.
I am not a crackpot.
The second this takes off, there's going to be a business in optimizing people's social profiles - if nothing else, the things you should have/not have on your profile will spread through word of mouth and experience. The reason facebook et al is used for evaluating people is the idea that people might not "keep up appearances" there, right? But if it impacts your personal finances or job prospects most people would just tighten up out of fear. It's self-defeating. It's also dreadful since it'd presumably lead to people making themselves out to be oily cookie-cutter smilies for financial benefit, conformity of the worst kind.
Emotions! In your brain!
Inorite?
I didn't think much of "What's your favorite color?" or even "What's your favorite brand of pop?".
But then, out of nowhere it was all "If you *did* have a dead body to hide... where would you put it?"
I probably should have lied on that one...
Absolutely not. I'll tell you why: There is currently no way to verify who you say you are on social networks, hell, some of them you can sign up with a fake, made-up name... all you need is a valid email address which can be anything. Oh, and that email address can be webmail, which also does not attempt to verify your identity. This makes it incredibly easy to set up fake accounts or profiles in someone else's name.
Absolutely NONE of these services have a way to accurately verify your identity. They don't even try for the most part. This alone means that searching for Bob Smith's facebook page does not guarantee that I find the real Bob Smith's facebook page. Or that anything posted or linked to Bob's profile has any accuracy whatsoever.
Stuff can become attached or linked to your social media profile, even without your knowledge. Character assassination anyone? Someone you know (or even don't know) can take a picture, post it online and tag it with your name, and there is absolutely no way to verify who is in the picture. I can take a picture of my cat taking a dump and post it, tag it with a friends name, and this will then get linked to their profile.
Do you see the problem with this? If a prospective employer or a credit service wants to search for my name on social media sites fine, but I expect they will be smart about actually using unverifiable information to determine my credit or job worthiness. The mere act that they would use unverifiable data to back up a decision on something important like a job position or a credit score, tells a lot about the company. Luckily I live in the EU where this sort of thing is not widespread and we actually have strong personal data protection laws.
credit agencies breaking the law in a way that treats individuals inequitably
That's kind of hard to do, since the government wrote the law to protect credit agencies from the effects of their fuckups.
If I told your boss you owed me five million dollars and your boss decided you were a risk and let you go, you'd have lawyers out the wazoo begging to take up a slander/libel case against me. If Experian tells your boss you owed me five million dollars and you lost your job, they're out a mandatory credit report.
If I have been able to see further than others, it is because I bought a pair of binoculars.
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.
You may have got extra attention because of the money you had access to. They may well be wondering why you want to get a mortgage when you don't need it.
These comments are my personal opinions and do not necessarily reflect the opinions of the other voices in my head.
That problem suggests its own solution: poison the well by pre-emptively polluting Facebook etc. with fake profiles carrying garbage (but non-specific, non-damaging) information. As an upside, it'd devalue the database for other data-mining efforts too.
No kidding!!! What do you say at this point?
Quick, someone look up Kevin Bacon's credit score!
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.
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.
A Pirate and a Puritan look the same on a balance sheet.