Your Social Media Posts May Soon Affect Your Credit Score
There’s a new reason to be careful when updating your Facebook status. As reported on Investors.com, talking about a weekend of debauchery might lower your credit score.
The Fair Isaac Corporation (or FICO), a credit rating agency, is implementing new strategies for assessing a consumer’s creditworthiness. In addition to looking at the information offered on social networking sites, the agency will also be looking at smartphone records.
“If you look at how many times a person says ‘wasted’ in their profile, it has some value in predicting whether they’re going to repay their debt,” FICO CEO Will Lansing told the Financial Times.
TransUnion, another credit rating company, is also adding ways to determine a credit score. While the agency will not be using social networking websites, they will add data from payday lending businesses and club memberships.
The agencies both said the new data will supplement the current assessments tools, which include credit card and loan records.
The new credit assessing system is not necessarily intended to negatively impact credit scores. The new method can also give consumers access to credit. FICO reported that nearly 18 million Americans don’t have access to credit because they had negative reports in the past. An additional 25 million have never had credit.
In the report, FICO said, “Using the right alternatives to traditional credit bureau data, lenders can reliably identify millions more consumers who qualify for credit.”
TransUnion says its new CreditVision system has been able to approve an additional 24% of consumers for auto loan lenders.