Can Social Media Ruin Your Loan Application?

By in Buyers with 0 Comments

When I was a kid I always wanted to read minds. In fact, in the What Super Power Do You Have? quiz I took on Facebook, I think that was what it said was my gift. I just want to know what people are REALLY thinking.

So, FYI, lenders are using Twitter and Facebook and other social media realms to learn more about borrowers:

Casual comments between friends, status updates and photos can be a great way to communicate, but that information is also being dissected and analyzed, according to insiders in the technology industry, to give financial organizations greater accuracy in creating a credit profile for potential borrowers in addition to their official credit history.

“What (financial institutions) have found is if your friends tend to be good credit risks, such as pay their bills on time, you are likely to be also,” said Lorrie Cranor, a professor of computer science at Carnegie Mellon University specializing in privacy issues.

They cite the example of someone with a great credit score who loses his job and lets his friends know about it on Facebook. The credit score tells about your past behavior. Social media displays your current behavior and gives a better glimpse of your future behavior than your credit score does.

Jack Vonder Heide, a technology analyst who follows the banking and financial services sector, said the concept known as “social media monitoring” has emerged because the existing credit scoring system doesn’t always work anymore.

“A credit score advises a bank on how well you have paid your bills in the past,” said Mr. Vonder Heide, CEO of Technology Briefing Centers in Oak Brook, Ill. “But social media monitoring will tell a bank how likely you are to pay your bills in the future.”

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About The Author
Cari McGee

My husband and I came to the Tri-Cities in 1994, and we thought it would be a temporary stop on our way to larger cities. He was a television sports anchor at the time, and we planned to go wherever the "next step up" took us. Twenty-plus years later, we're still here and we've loved every minute of it! We have two children now, and we've found the Tri-Cities area is a wonderful place to raise a family. It's a great place to do outdoorsy things -- I like to hike Badger Mountain or run along the river path. I also love reading ... by a cozy fire in the winter or a beautiful picture window in the summer (with the A/C on!). I've been a licensed Realtor since 2004. I earned my managing broker's license in 2016, which means I can run my own brokerage, or create a team of real estate agents and supervise them, which is exactly what I did when I formed the Cari McGee Real Estate Team in 2018! We have administrative and marketing personnel, as well as additional agents to serve you. I became a director of the Tri-Cities Association of Realtors Board of Directors in 2016, became Secretary/Treasurer of the organization, and was elected to Vice President in 2019. Want to talk about real estate? Click here to schedule a meeting with me!

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