Can your comments affect your credit? Yup.
Did you know that everything you and those in your network do and discuss online may be compiled and provided to creditors? If your settings are tuned to public, it's true. This includes your Facebook status updates, Twitter "tweets," joining online clubs, linking a Web site, and even posting a comment on a news blog (such as, well, this one).
It's fascinating stuff. Here is my full story that came out today, Social networking: Your key to easy credit?, but in brief -
What's going on: In hopes of identifying good credit customers, some financial institutions are tapping into the information you and your friends reveal online. The idea is that the friends you keep and data you disclose may help them make more accurate business decisions.
Who is doing it: Companies such as Rapleaf hunt and gather social networking transmissions, turning the conversations you have in your network into consumer profiles. These profiles provide banks with insight into your behavior patterns - what you like and dislike, want and don't want, do well and do poorly.
How it's being used: There are a couple of ways this information may be applied. It can help creditors promote certain products, cutting down on marketing waste. Why sent pre-approval letters to people not interested, right?
Lowering lending risk is another reason. Creditors can see if people in your network have accounts with them, and are free to look at how they are handling those accounts. The presumption is that if those in your network are responsible cardholders, there is a better chance you will be too. So, if a bank is on the fence about whether to extend you credit, you may become eligible if those in your network are good credit customers.
Having a robust online social network can also expedite loan acceptance. If you're connected to a lot of people who are great credit risks, it can speed you through the process. Amazing, isn't it?
What you can do. While financial institutions and companies that gather your online data are emphatic that the idea is to increase the odds of a person getting credit, what you reveal online can have unintended consequences. Therefore, if you want to opt out, turn all of your settings to private. Other best practices:
- Don't accept invitations to your social networking site from people until you check their profiles out first.
- Be acutely aware of what you write. Don't make public anything you don't want public.
- Take an annual inventory of all your social networking sites and delete people and information that can potentially damage you in the eyes of a creditor or employer.
There is a problem to going completely underground, of course. If you're like me and want to be found (I couldn't conduct my business as well without being public), you won't be