Slashdot Mirror
How Deadbeat Facebook Friends and Using ALL-CAPS Can Lower Your Credit Score
McGruber writes "CNN has the news that some financial lending companies claim that Facebook social connections can be a good indicator of a person's creditworthiness. One company determines if you are friends with someone who was late paying back a loan; if so, that is bad news for you. It is even worse news if the delinquent friend is someone you frequently interact with. Another company gathers information from the manner in which a customer fills out the online loan application. The chances of getting a loan improve if you spend time reading information about the loan on their website. Conversely, if you fill out the application typing in all-caps (or with no caps), you are knocked down a couple pegs in that company's eyes. A third lender requires that small business borrowers grant them access to the borrowers' PayPal, eBay and other online payment accounts (what could possibly go wrong with that?), thereby disclosing real-time sales and delivery information."
If your bank carries that much stock in Facebook "friends" you may want to consider borrowing from a different bank.
Kind of like employers who want your twitter password, just maintain eye contact and slowly back out the way you came in.
Dubious credit criteria and validation got us into a huge subprime mortgage mess and contributed to an economic downturn. Fortunately, this method doesn't appear to be widespread, but the same principle applies. Folks haven't learned the lessons of the last 100+ years and seem doomed to repeat the outcomes.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
The personal and privacy costs of being a Facebook user are very high and increasing daily. No thanks.
HOW DOES I GET CREDIT CARD?
Don't want to deal with a company who rates my credit based on my acquaintances, whose financial situation I'm not aware of. Happy for them to take themselves out of the picture.
How using Facebook at all can bring harm to you in real life.
Case in point: a colleague's teenage daughter applied for a summer job at the local supermarket, got selected and went to a job interview. The interviewer asked her to "describe herself". She did, and the interviewer then said "that's not what your Facebook says. Thank you, we'll call you." She's only 16 and she wasn't doing anything particularly public or outrageous on Facebook. It hit her hard and my colleague says she's been kind of depressed by the rejection she's faced.
As for me, I've learned the hard way 13 years ago (before Facebook but after Google) that the internet never forgets, and whatever you say will come back to haunt you eventually. As a result, I've learned to shut my trap online whenever possible.
"A door is what a dog is perpetually on the wrong side of" - Ogden Nash
This is why I friend corporations. It balances out the financial status of my real friends.
If you don't have Facebook account, banks conclude you are a sociopath and offer you CEO job.
What if you're not on facebook at all?
Technoli
The summary leaves out that the companies described aren't the major financial institutions in the US. The one who checks to see if you're friends with someone who defaulted on a loan from the same lender? Lenddo, which makes loans in the Phillippes, Colombia, and Mexico. The one who LOOKS FOR ALL CAPS? Kreditech in Germany, which uses that and "up to 8,000 data points" when assessing the loan (though I can't argue with that; as someone sitting down with a banker in person and YELLING THAT THEY WANT A LOAN is probably not a reliable borrower).
As for whether lenders should just use FICO, if FICO is available? It's reliable and predictive, and more difficult to game, but in an emerging market where your prospective borrowers don't have FICO history, what do you do to suss out whether a borrower is likely to default or not?
Creepy? Yes. But also logical.
Looking at friends, I think, would be a great indicator if someone has no credit history, or if they're taking out a large loan and have never done so before. It would be foolish of them to look at your friends if you've got a full history of being responsible with the kind of loan you're asking for -- I can't see them doing this.
And your account logins, OF COURSE THEY WANT THIS. Everyone does, because everyone is fucking evil. I'm totally not surprised. Don't sign up with them.
I keep some of my savings at Lending Club, which originally started out as a Facebook-based microlending platform -- the idea was that if you knew the people you were lending to, or at least understood their social graph, that you'd make better lending decisions. They dropped the concept a few years ago, my guess is that it didn't scale and there were practical difficulties. (I could see issues arising from sockpuppetry and slander, among other things...)
They do still loan to individuals, and when you lend you read their application, you can see where they live, their FICO, and what they plan to do with the money. And, guilty as charged, I never lend to people to do their application in ALL CAPS :)
Don't blame me, I voted for Baltar.
And you miss the point entirely.
It doesn't matter whether it's Facebook or not. Your average Slashdot karma "score" and "friend," "foe," and "freak" settings could be abused like this.
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BMO
Spigot likely has the lowest credit score possible.
It only costs as much as you pay into it, if that.
I suppose filling in a loan application form in red crayon is a bad idea? that might explain why I had so many problems...
This seems to be something I do when putting occasional effort into evaluating someone's comment I've read at Slashdot. Syntax, grammar, punctuation, on-topic, etc., not to forget the friends/enemies list at the Users page. Does having something in common with these people mean it's time to hang myself?
Only if you're applying for credit or an account at a financial institution as "bmo".
Just finished reading this article on CNN and saw it here (kudos, Slashdot, for timely and on-topic).
So here's an informal poll for readers: Just what, exactly, does using all caps to fill out a form indicate? I always use upper case letters when filling out paper or online forms. Why? Because an overseas minimum wage call center employee might misread my "l" for an "I" and mess up transcribing my loan application/income taxes/ insurance information/other important application type here.
I think that is an indication of understanding a potential weakness in the application process, not credit-worthiness. What say you?
"were worried" as in past tense? Now I'm worried that the NSA (or underpaid official who works there) will start selling its profiles on people to corporations that cooperate with data collection. A trade of data as it were.
Even if you're not a facebook user, your friends can still tag you in photos. Facebook will still track you.
Shutting down free speech with violence isn't fighting fascism. It IS fascism!
This sort of thing is exactly why I started my own ANTIsocial network. I'd invite you to join, but hey, antisocial.
It's supposed to be completely automatic, but actually you have to press this button.
In that case, can I have a loan, bmo (77928)?
First of all, "credit scores" should be banned. The report should just contain whatever info it contains and it should be up to the lender to assess risk.
... That is, until it hurts your credit to NOT have a Facebook account. It hurts your credit to not have credit cards, it only stands to reason that, if this sort of information is fruitful, it'll cost you to not provide it.
Don't blame me, I voted for Baltar.
"He that lieth down with dogs shall rise up with fleas"
At least not as people normally think of it. When you talk about "credit score" what 99.9% of people mean is your FICO score. This is not getting factored in for FICO. Rather this is for people who don't have a normal credit history. If you have a standard credit history with the credit bureaus, a FICO score will be calculated on that and that's the thing lenders will look at. Nobody gives a shit about your Facebook friends if you have a history of paying debts on time.
This is for people who, for whatever reason, don't have a credit score. This is an alternate way to try and evaluate their risk potential. How good an idea is it? I dunno, guess we'll have to see. However this is not something that is just getting added to your credit score, sensationalist headlines to the contrary.
Only if you're applying for credit or an account at a financial institution as "bmo".
There are plenty of people who post with their real names here.
There are people who have totally fake profiles on Facebook, in spite of the Facebook TOS/AUP.
But that's totally irrelevant to the point I made. The point is that participation in online discussion is vulnerable to data-mining irrespective of the forum. Ranting about Facebook as if it's somehow more "dangerous" than Slashdot, or any other publicly available site, is myopic.
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BMO
Not having a Facebook account will likely never be illegal, as such. It's just that failing to provide your Facebook data will be grounds for a lender or an electric company to deny you service. Kind of like Social Security Numbers -- you're not "required" to provide it to a phone company, but the company is free to deny you service if you don't.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
Yes. I'm one of them, here. But my point is that it is less likely to be a contributing factor from Slashdot.
That said, I'm not sure what use any of the connections are, when most of the people in someone's circle on a social work are not representative of people they choose to have part of their actual real-life circle. Almost all the people on any social network I use are a couple professional colleagues and random people I don't actually know at all. I don't even add my family to any of my social networks.
The real danger of all this is when people start posting defamatory things about an individual online or even starts posing as them online. Now it isn't even your supposed social-graph determining your credibility, but trolls.
One company determines if you are friends with someone who was late paying back a loan; if so, that is bad news for you. It is even worse news if the delinquent friend is someone you frequently interact with.
Reasonable but evil. I would not do business with this company.
Another company gathers information from the manner in which a customer fills out the online loan application. The chances of getting a loan improve if you spend time reading information about the loan on their website. Conversely, if you fill out the application typing in all-caps (or with no caps), you are knocked down a couple pegs in that company's eyes.
Reasonable and not evil. Understanding the terms of a loan typically means you're going to make at least a good faith effort to fulfill your obligations. I would probably do something like this myself.
A third lender requires that small business borrowers grant them access to the borrowers' PayPal, eBay and other online payment accounts (what could possibly go wrong with that?), thereby disclosing real-time sales and delivery information.
Unreasonable, evil, AND the potential to steal money from everyone who has applied for a loan! Is that you, Enron?
It's better to vote for what you want and not get it than to vote for what you don't want and get it.
- E. Debs
Only if you're applying for credit or an account at a financial institution as "bmo".
Riiiiiiight... because the government and massive corporate interests never ever abuse panoptic surveillance and collude to single out individuals for a good solid buggering...
and before you go all, 'dur, NSA + GCSB != private corporate interests,' try to keep in mind that the assault on Dotcom's privacy all began with the MPAA alleging that he was involved in copyright infringement.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
I do not fail; I succeed at finding out what does not work.
The computing is so cheap that they can't even afford a [shift] key.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Basically, it's 3 companies that can arbitrarily decide your worth as a human being. They can use just about any method they feel like using, don't have to explain how they got to the conclusion they got to, and the information can be used by almost any company to decide everything from where you can live to what jobs you can have and what prices you have to pay.
So yeah, that number is steadily turning into much more than what interest rate you'll pay when taking out a loan.
I am officially gone from
If you're lacking better data points, like actual credit history, I think it's perfectly reasonable to consider, as one small factor, whether or not they are responsible people. Generally, those who can be trusted in the small things can be trusted in the big things and those can't, can't. Generally.
kids graduating high school^W^W university are too young to have watched the Dukes of Hazzard.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
You are judged by the company you keep. Deal with it.
If we had just "dealt with it" every time those with power abused their position, black people would still be slaves, women would still not have the vote, children would still be down in the mines, and manual labourers would still barely earn enough wages to live while working crazy hours under conditions that would seriously damage their health.
We have a long way to go, even in the first world, in terms of respecting each other as human beings. We aren't going to get much further if we adopt your attitude every time essential services that make society work start taking advantage of asymmetric power relationships with the ultimate goal of making more money no matter what.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
"When people ask me to get in touch via facebook, I tell them I'll fax them."
You're so edgy and unique.
I use facebook for my hobby-time friends, which for me means a lot of actors and singers - many of whom are marginally or underemployed. Oh well, I've got points to give, I guess.
Is it just my observation, or are there way too many stupid people in the world?
That said, I'm not sure what use any of the connections are, when most of the people in someone's circle on a social work are not representative of people they choose to have part of their actual real-life circle.
This is the most important thing about why using social media "friends" networks to somehow divine whether one is a good credit risk, good at a job, or /anything/ is just dumb and frankly nonsensical, and this is why this whole "online identity==offline identity" business offends me and should offend everyone here.
Whether it's Facebook or some other social media (even going back to the Dialup BBS days - plus Ãa change, plus c'est la mÃme chose ) doesn't matter. The whole concept is flawed.
Now it isn't even your supposed social-graph determining your credibility, but trolls.
Synchronicitous radio:
The real trolls file fake liens (story on NPR right now - All Things Considered).
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BMO
nobody needs that kind of experience.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
>french quote
>slashdot butchers anything not ASCII because no Unicode
Fucking slashdot.
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BMO
Sure, just go to branch 77928 and apply.
PSA: If you have bad credit, you cannot be my Facebook friend seeing that it will now effect my future credit ratings. Don't be mad at me, I'm just repeating what the media told me. #crazymedia
Seriously, just stop wanting what other people have, that's really all there is to it.
And what happens next week, when the health insurance people jump on the bandwagon? Shall we also not worry about not being able to get healthcare at affordable prices because a disproportionate number of our Facebook friends smoke/drink/sleep around/enjoy high risk sports? After all, you could just die instead of getting treatment, right?
The fact is, modern society often works on the assumption that people can get credit under reasonable conditions. If you want to take a principled stand that credit is unnecessary then you should advocate prohibiting giving credit on commercial terms at all. Of course, if you do it to everyone equally then you'll have to accept the resulting economic collapse as your nation's house prices drop by 75% overnight and a large, useful, skilled section of the labour market becomes mostly unemployable.
Or we could do the sensible thing, by allowing commercial credit arrangements but regulating them to prevent lenders from abusing their disproportionate power such that some borrowers suffer unfairly. As with any other essential industry that gets regulated, the price of playing the game becomes having to play by fair rules.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
Nobody should use their real name on Facebook.
The Internet has been spoiled. We're due for the next platform soon. I'm glad I got to see what it was like during the early years, before the corporate and government takeover.
It didn't have to go like this, but we were so excited about the possibility of making money that we let the place go to shit, and we let the parts of greatest value get destroyed.
You are welcome on my lawn.
...what's considered normal in your social circles is contagious. Just like fat friends can make you fat. If your friends are poor managers of their money then you don't feel so bad about being a poor manager of your own money.
> you are not lacking better data points - what bank lends money out without knowing credit history?
The ones in TFA. That's been mentioned about a dozen times in the comments also, btw.
Getting a bunch of speeding tickets doesn't affect your ability to pay your bills? Either part of your paycheck goes to pay the tickets, or you EVENTUALLY go to jail, which again makes it harder to pay your bills.
Along with the ability to pay the bills there's whether or not you will be responsible enough to actually do so. That ends up coming down to whether you do what needs to be done, or do whatever you feel like at the moment. People who mow the lawn even when they don't feel like it and go to work even when they don't feel like it might pay their bills even when they don't feel like it.
So yeah , there's actually a good reason nobody wants to loan their money to you.
If you have a history of keeping your loans in good standing then you can sell your "friendship" on facebook. Charge something like $15/month to be friends with people who are applying for a loan.
When information is power, privacy is freedom.
Not I like to read all-caps, but it's standard to many formal/official/government documents. Birth certificate, DL, etc etc. Standard USPS address format is all-caps. Even the name on credit cards is all-caps. During loan application they often ask one to put exactly the same info on your formal documents. Oh maybe they're saying they themselves are credit worthless, which is true to some extent...
There is a major difference between chat, email, etc in ALL CAPS and filling out a form in ALL CAPS. I often times fill out forms in all caps due to the fact that many are scanned and OCR tends to work better with caps than lowercase letters. This is especially true for hand-filled forms. In fact I have filled out forms that *explicitly ask* you to use all caps when filling them in.
Windows is a bonfire, Linux is the sun. Linux only looks smaller if you lack perspective.
I did not RTFA, but this sounds like some of the practices mentioned could possibly be illegal in Ohio. Ohio law requires that credit histories of individuals be maintained separately. I don't think it would be going too far to argue that considering someone else's history (just because you are Facebook friends) when determining credit worthiness runs afoul of the law. The law also requires that credit be extended equally to all who are creditworthy and, again, considering the payment history of someone else could be determined to be illegal.
What's next, checking your cupboards to see your choice of breakfast cereal? GrapeNuts or Shredded Wheat (unfrosted)? Approved. Frankenberry AND Fruity Pebbles? Denied. Blacklisting by zip code is considered discriminatory and is already illegal, isn't it? Judging based on the payment history of acquaintances should be as well. Shall we revert to concepts of family honor, too?
This is a hacked account, for which the owner can not be held responsible.
> Serious question here. What if you do not have a Facebook account?
It indicates that you are NOT a dumb fuck... http://gawker.com/5636765/facebook-ceo-admits-to-calling-users-dumb-fucks That should be a plus for you.
I'm not repeating myself
I'm an X window user; I'm an ex-Windows user
WELL, THERE GOES MY CREDIT SCORE.
FUNNY, MANY CREDIT REPORTS ARE WRITTEN IN ALL CAPS. POT. KETTLE.
THE FOURTH AGAINST THE WALL AFTER THE REVOLUTION WILL BE THE CREDIT BUREAU EXECUTIVES. THE FIRST THREE WILL BE MARKETING EXECUTIVES FROM SIRIUS CYBERNETICS CORPORATION, LAWYERS AND POLITICIANS.
Damn. The all caps are hurting my brain.
And it tripped the filters.
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Lameness filter encountered. Post aborted!
Filter error: Don't use so many caps. It's like YELLING.
Serious? Seriousness is well above my pay grade.
A punishment for using caps lock! My prayers have been answered!
Well, I might have a way, but it only works on a semi spherical planet in a vacuum.
Bad debtors being ostracized by their friends and family. This sickens me.
How do they actually identify you? Typically there's several people with your same name. (And that's assuming you've stupidly used your real name on Facebook.) Even if you have a very unique name, it's not like your credit information has your mugshot on it to compare. Seems like this could be generating an awful lot of false information.