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Facebook friends could change your credit score
- mrt0mat0 13y agoWhen I finally get a handle on my credit score, they have to come in and make my facebook profile another factor.... Next it will be my sleeping patterns, because some article somewhere said that sleeping patterns determine your likeliness of paying your bills on time.
- MichaelApproved 13y agoAnd driving patterns and browsing patterns and places you frequent and type of drinks you consume and job history and exercise frequency and weight and what you watch on TV and stool sample and reddit karma and sperm count and number of icons on your desktop.
- VLM 13y agoThat will be for the upcoming health insurance quotation system. It already vaguely resembles what I went thru for a life insurance policy.
- nathan_long 13y agoIf only it were bilateral. "Dear insurance companies, I'm shopping for a policy. Please fill out this bid form so I can verify your business history, tax compliance, carbon footprint, employee demographics, political contributions..."
- bougiefever 13y agoHmm, since I'm female, I'm a little worried my sperm count might be low... I do have plenty of icons on my desktop though. Do you think that will help?
- hga 13y agoCheck again, this has nothing to do with your FICO, it's about some companies who are lending to people who don't have that sort of credit score, or another that is lending to small businesses that can add social media to FICO in their decisions: "Borrowers grant Kabbage access to their PayPal, eBay (EBAY, Fortune 500) and other online payment accounts, disclosing real-time sales and delivery information. The company says it can determine a business' creditworthiness and put money into its account in just seven minutes. Once a small business is getting credit from Kabbage, it also has the option to link up its Facebook and Twitter accounts to the site, which could provide a bump in its "Kabbage score." The small businesses that do are 20% less likely to be delinquent on their loans, Golin said." The article's real title is a lot better, although still link baity: "Facebook friends could change your credit score"
- shiftpgdn 13y agoHonestly HN out to ban CNN links. I haven't seen an article from them that wasn't linkbait.
- cmdkeen 13y agoThis is more to do with people who don't have traditional indicators for credit scores, rather than throwing away everything else. The Economist covered it a while back in developing nations - if your credit score suffers because of a friend you can exert social pressure on them to pay back the loan. You don't want to be known as a deadbeat to your friends so you are less likely to take out a loan you can't afford. Though in that example the social network is an explicit opt-in I believe.
- 001sky 13y agoThere is most likely an informal 'friends of friends' effect for the wealthy and priviledged in any event. Take a look at, for example, the VC market and its extensive reliance on private, pre-existing relationships. While equity is not credit, the techniques of investment selecetion (both deal generation and screening) are at a macro level shared elements. Now, the more concerning issue is when poor people are flagged as at risk because they are poor. Sort of the reverse of the well connected wealthy people getting a helping hand.
- aestra 13y ago> Kreditech can determines your location and considers creditworthiness based upon whether your computer is located where you said you live or work. Um... How does it determine your location? Your IP address? Cause that's really a good indication of where your computer is physically located. Hint, our work traffic is routed through company headquarters halfway across the world before reaching Kreditech's website. Now Kreditech thinks I am lying about where I am located. Great.
- kintamanimatt 13y agoAs do some twitchy credit card fraud filters!
- ScottWhigham 13y agoIf ever there was a time for the HN mods to change a title, I would think this sort of article would be a good choice. That said, even the original article title ("Facebook friends could change your credit score") is just flat out wrong. Your "credit score" - as in your FICO score, for example, has nothing to do with Facebook/Twitter/etc. The article is a good expose on what other data that companies are using in addition to your credit score. The title is just for link-bait reasons, nothing else.
- corin_ 13y agoI'd say this is an example of a title that, while technically wrong, is ethically fine - well, maybe not quite, as it's wrong, but it's wrong for the right reasons. I doubt anyone cares about their credit score for the sake of the official number of their credit score, people care about it because of what it means when you want to buy a house, or take out a loan, or sign a mobile phone contract. If Facebook friends affect these things negatively (or positively), then I don't care whether it's because they change my credit score, or because everyone looks at these things as well as my credit score, either way it has the exact same effect.
- drivingmenuts 13y agoCar and house purchases use a slightly different metric to determine your creditworthiness, acc. to the dealership where I got my car. Essentially, cars and houses are material objects that can be repo'd far more easily if you don't make your payments. Personally, I'd be happiest if I had a credit score of zero or whatever the number indicating non-existence is these days.
- ignostic 13y agoThis is the first I'm hearing of it, but assessing credit risk based on social profiles is almost definitely illegal. Conclusions based on friends or location rather than actual history will have a disparate impact on minorities. http://en.wikipedia.org/wiki/Disparate_impact http://en.wikipedia.org/wiki/Disparate_impact
- elmuchoprez 13y agoThat seems to have to do with employment practices. The article is talking about a private company using publicly available data as a factor in determining whether or not to extend a loan to you. I think it's kind of shitty, but I don't know that it's any different than say using gender as a factor.
- hawleyal 13y agoIn the USA, that gender thing is illegal.
- saosebastiao 13y agoI'm wondering how many of the factors are based on things that can be identified from photos. You can probably get some very strong (and useful to lenders) criteria from photos, and yet be treading very dangerous water with regards to discrimination.
- fluidcruft 13y agoCool, cool. Cool, cool, cool. So now who gets to build a facebook-based credit score optimization app. Buy and sell your friends so you can buy a house/get a job.
- vikas0380 13y agoOr a friend suggestion app to increase your score
- malandrew 13y agoI would assume that any friend that helps your score would have their score hurt by being your friend.
- BlackDeath3 13y agoEventually everybody simply shares the same credit score.
- sliverstorm 13y agoNot necessarily. Say you both have the same credit score. If you befriend eachother, that reduces the negative impact of friends with lower scores for both of you, by reducing their overall weight.
- mrt0mat0 13y agothis could have the potential to break the concept of facebook (though it has managed to do much of the damage on its own) in that it makes you unfriend people so you don't have a negative mark, and add friends you don't like or socialize with, and force you to talk to them, just to help your chances at a loan... seems like the only facebooks true purpose will be lost
- icebraining 13y agoNah, you just need a second FB account just for these purposes.
- peterkelly 13y agoThe only thing mentioned in the article that I agree with them using is penalising people who submit applications in all caps.
- dreamdu5t 13y agoSo? Why shouldn't someone be able to use public information to publish their own ratings of your credit worthiness? Nobody has to trust the popular credit rating agencies, and people are free to make their own ratings/certifications or start their own companies that do so (unless the government prevents that... which if so, is a problem with government not the rating agencies.)
- hannibal5 13y agoThis is not question of credit ratingt agencies getting wrong results. They use these systems because they work. Big number of false positives is just collateral damage. Maximizing expected value is what banks and insurance companies want. It's like poker, you don't play to win every hand, you play to get more money.
- nitrogen 13y agoNobody really wanted their entire social network to be public; Facebook kind of removed the option. Even those who think they have nothing to hide don't want this.
- rayiner 13y agoThis is what I'm worried about way more than NSA spying: the potential for companies using Facebook data and data in your GMail, and the like, to screw you. This is where the real money is. I've had several friends who had trouble with background checks for jobs because they had collections on their credit score and the like. The ridiculousness of it: people hindered from improving their financial situation because of their past financial situation.
- kintamanimatt 13y agoWhy not be worried about both? Don't confuse palpability with severity!
- bougiefever 13y agoI think it's awesome they are knocking down applications IN ALL CAPS. Finally someone is punishing internet shouters in their pocketbooks.
- nijiko 13y agoWow. Just... wow. Speechless, another reason not to use Facebook.
- Houshalter 13y agoPeople will likely freak out about this but I don't see anything wrong with it. Making more accurate predictions is a good thing. Why does it matter what the data used was? Unfortunately I expect this to become another "illegal datapoint" that is illegal to take into account. People hate the idea of being judged for seemingly arbitrary things. Which makes sense. But if it actually does correlate with the truth, if it actually makes predictions more accurate on average, why shouldn't it be used?
- DougWebb 13y agoBut if it actually does correlate with the truth, if it actually makes predictions more accurate on average, why shouldn't it be used? Because statistics. Correlation applies to populations of data points, not individual data points. Even if 99% of the data points have a certain feature (an extremely strong correlation), the 1% of outliers should not be penalized for being similar to the rest of the group in other ways.
- Houshalter 13y agoBut this is an argument against making any kind of predictions at all, as it could negatively affect some individuals. I don't see why that should be so, especially if it positively benefits everyone else a lot more and is a net benefit. For every person that loses one dollar, 500 people gain 50 cents. To look at it another way, by not taking that data into account, you are making those 500 worse off. I don't see how that is preferable. If we had a time machine to go into the future and see what loans would be paid back and which ones wouldn't, that would be ideal. But we can only guess. If our guesses aren't 100% accurate, are we saying we shouldn't try at all?
- fnayr 13y agoTaking a millionaire's wealth and distributing it to the starving would have a positive net benefit as well.
- Houshalter 13y ago
- mcgwiz 13y agoAll sensationalism, little substance. Particularly regarding the topic of the link-baity title. > "One such company, Lenddo, determines if you're friends on Facebook (FB) with someone who was late paying back a loan to Lenddo.... No explanation of the what the mechanism for collecting this is. Likely it's a matter of opting in to share your data through a Facebook app, an act whose culpability lies with the consumer. > "Lenddo has about 250,000 members, but it only operates in the Philippines, Columbia and Mexico." Um. Ok. Three sem-developed nations. It's journalistically incompetent not to explain what the relevance of those nations are to the operation of Lenddo, and why any of that is relevant to the American general public. The only thing I learned from this was that CNN Money articles can be remarkably content-farmy and AOL-like, and HN readers can subdue their analytical spirit when it comes to piling on the criticism of an already-hated company (e.g. Facebook).
- readme 13y agoTitle is linkbait. This has nothing to do with your FICO score (what credit score tends to imply here in the US). Only some small startup lenders are doing this. What a relief, since I deleted most of my facebook friends and left only two people on it. Although, from what I'm seeing, that could be a plus for some of these lenders!
- coin 13y agoHow do the credit scoring agencies link one's identity to their Facebook profile?
- mcintyre1994 13y agoThey don't - the startup considers it in addition to the credit score in making their decision. That said, I don't imagine you need a great deal of data to identify most people's Facebook account, not aware of any research into that though.
- pjbrunet 13y ago"When you run with dogs, you pick up fleas."
- mathattack 13y agoWhat's interesting here is that they would Facebook rather than LinkedIn. Perhaps the LinkedIn network will suggest "Can you afford to pay?" while Facebook is "Are you inclined to?" Or perhaps they're targeting low income folks who aren't on LinkedIn?