While we were on break, a story broke about credit that blew my mind.
Brace yourself for this: Watch the company you keep, because your Facebook friends can lower your credit score.
Some lending companies think that social connections on Facebook can be a good indicator of a person’s creditworthiness. One site, Lenddo, determines if you’re friends with someone who was late paying back a loan to Lenddo. If you are, it’s bad news for you. And it’s even worse if the tardy debtor is your best friend—the more you interact with them online, the greater the concern of the lender.
That sounds like it can’t be legal. And even if it is, it doesn’t sound ethical.
The truth is that we’ve all left more digital fingerprints than we can count, and companies are figuring out ways to capture those fingerprints and capitalize on them. What you do on your computer is being monitored and judged. Information gathered from eBay and Amazon are amongst the 8,000 data points another company uses when reviewing a loan application.
And Big Brother doesn’t stop there. Get this: Another company gathers information about potential loan applicants from the very moment you click on the website. If you spend time reading information about the loan, you are more likely to get one. If you fill out the application with all capital letters or with none, you’ve raised a red flag.
Is there any penalty for mixing up “your” and “you’re”? Because there should be.
These are niche lenders employing these techniques, but experts say it’s on the verge of going mainstream. But it’s not all bad. Sharing personal information with lenders could actually help you if they like what they see.
One small business lender gives debtors the option to link their Facebook and Twitter accounts to their site. Linking can come with perks because the small businesses who choose to link up are 20% less likely to be delinquent on their loans.
So what’s the final verdic? Do we need to de-friend that uncle who can’t keep the lights on?
Not yet. The vast majority of lenders still use the good old FICO score—that’s the traditional credit score that ranges from 300 to 850. They’re called “FICO Scores” because they’re generally produced from software developed by FICO (Fair Isaac and Company). Equifax, Experian and TransUnion are the Big Three. If you’re worried about qualifying for a loan in the future, do your best to raise your own credit score and let your friends—cyber and otherwise—worry about themselves.
Mellody is President of Ariel Investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts. Additionally, she is a regular financial contributor and analyst for CBS News.
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This Week’s Celebrity Instagrams (11/26-12/2)
30 photos Launch gallery
1. Little Legend and Puddy 😍😍😍😍
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2. "You on point Phife?" "all the time,Tip". 💥 #bannedfromnormal
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3. Vegan! The Impossible burger at Crossroads
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4. Lawrence #BeforeandAfterEpisodes 1-4: 184lbs 13% body fatEpisode 8: 196lbs 8% body fat S/O @coachdaveboxing with the works outs and @kildareriordan with the nutrition
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5. Jus haaaanngin out
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6. Meanwhile back at home in Atlanta GA someone mad they not on the 🛳. 😳
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7. No limits... Photo cred: Chris Bridges @ludacris
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8. new new
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9. Apparently my 260lbs is too much for the actual vines in the Hawaiian jungles to hold me without breaking and me falling hundreds of feet. So for safety purposes, I'm forced to swing thru #Jumanjj on wires strong enough to hold 12 adult buffaloes and 1 adult Rock. #OnSet #Jumanji #IronicallyIEatBuffaloDailyForLunch #MoreManThanNatureKnowsWhatToDoWith
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10. hey ma! 🎎#wcw 💙
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11. Surprise visit to our factories!!! #GoodAmerican #USA
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13. Peachy Keen 🔥✨⚡️
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14. If this don't look thankful I don't know what does. Happy Thanksgiving to you and yours. #UltraBlessed #24kMagic #SweetPotatoFly
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15. Late nights @nbcmarlon with the writers... we in here!!!
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16. There goes my baaaaaaaaabbbbyyyyy #QueenKingMagic!!! We're up to something! Ira BIG!!! Stay out our buisness -
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17. You want to win every game you play but when you come home to these faces... who cares. #ILoveYouGirls best part of my day, everyday!
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18. Steady,steady..... full size jenga.. "I got this one "???? Or do I ?
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19. Cornrows kind of day 😉@dontaysavoy2 you convinced me and I love. ❤️️
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20. #BrotherlyLove #tbt
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22. #basel #TeamLOVE @kingcombs
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23. Just introduced a special screening of @directher 's groundbreaking (must see) documentary @13thfilm with my brother @themichaelealy | @unitedblackout #blackoutblackfriday
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24. Me & Vanessa Williams giving #DuckLips #Pose on the set of #DaytimeDivas @vh1 - Coming Soon to a tv near you. Lol. - My make up done by @makeupsurgeon
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25. This picture just makes me wanna praise the Lord, you hear me!!!!!! Yes Lord brotha #TEDDYCAMPBELL What a #man !!! You are everything right on this picture husband ......... #gorgeous #stylish #classy #strong #masculine #king #sexy #debonair #gentlemenstyle And that #bible in your hand just seals the deal for me (probably cause i know that, that is what helped you become just as amazing as you look😘). While my heart and mind experiences the goodness of God at #church on Sundays, my eyes experiences the goodness of Teddy😍. Amen somebody🙌🏽. "Bless the Lord oh my soul and all that is within me bless his holy name" #myman #myhusband #goodman #blackman #dapperman #godlyman #goodfather #mybestfriend
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26. Yesterday was my mama's 53rd birthday!!!!! Got to celebrate with her all day. If this is what I have to look forward to I can't wait. Looking like a soft bucket a cocoa butter. Yaaaaaaaaaas! 😍😍😍 love you mommy!
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27. "Shout out to @PureAtlanta for getting the family right"....I'm loving this jogger. 😍😍
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28. This pic warms my heart ❤️ #myLogiebeans and aunt aunt umba @itowandabraxton 😘
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29. You will always be my baby😜. #HappyBirthdayReginae #mybaby18
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30. GC "Gods Child" Red on Red SweatSuit available now at www.MonicaApparel.com ... Take Your Crown wherever you go!! I'm pictured in a Medium... Go to the site now for other options ... cc: @trukernell
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