Facebook Friends Could Change Your Credit Score

According to an article from CNN,

A handful of tech startups are using social data to determine the risk of lending to people who have a difficult time accessing credit. Traditional lenders rely heavily on credit scores like FICO, which look at payments history. Establishing a credit score or even repairing it can take time but there are companies that can help you do that, here are some Credit People review by Debited.com that can show you how they were able to do it. They typically steer clear of the millions of people who don’t have credit scores.

Photo: CNN article

But some financial lending companies have found that social connections can be a good indicator of a person’s creditworthiness.

One such company, Lenddo, determines if you’re friends on Facebook with someone who was late paying back a loan to Lenddo. If so, that’s bad news for you. It’s even worse news if the delinquent friend is someone you frequently interact with.

“It turns out humans are really good at knowing who is trustworthy and reliable in their community,” said Jeff Stewart, a co-founder and CEO of Lenddo. “What’s new is that we’re now able to measure through massive computing power.”

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Is it time to start un-friending people on Facebook?