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 (6/18-6/24)
25 photos Launch gallery
1. Me & the homie @jaleelwhite #RujohnFoundation Happy to be in Jamaica! Good times
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5. Good Morning. Early day in Detroit! Making press rounds for @thebossnetwork's Ladies That Lead Tour. Thank you @traycemadre and @colourbynumbr for my glam.
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6. POWER the best show on TV @djenvy, Queens we so big out here. #EFFENVODKA #FRIGO
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7. They said u lost a step, wasn't explosive as once was, the best days was in the real view, questioned your drive, your leadership, your commitment, you don't have killer instinct, going back home is the worst mistake in your career, he got the coach fired, players traded, won't work between him and Kyrie, Him and Kev won't work, love your teammates to much, there's no way he can deliver a championship in his hometown, etc etc etc.... But guess what THATS NONE OF MY BUSINESS #StriveForGreatness #ThisOneIsForTheLand #PutSomeRespeckOnMyName Hahahaha!!! Yes sir
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8. Oooooh weeee this man right here is responsible for at least three of our four babies!! #JOE ❤❤❤🎤 #rnb #king #voicelikebutter #ForPeetesSake
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9. Hanging with my @abcnetwork family! @abcunclebuck tonite y'all check us out ! @anthonyanderson @traceeellisross
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10. My broski ( @sayeedshahidi ) and I are on Top 5 Live on @go90 at 5 (which is super duper close)! Make sure to tune in :) #UncleBuck #Blackish
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11. Lights out💤 #GoodNight
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12. Late nights mornings
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13. Ran into the lovely talented @siedahgarrett on this brutiful favvuz deh!
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14. #halal #love #thedargans #kattwilliamsSHOW #mashallah when that Jennah piece HIT!! @sweetjennahcollection glasses by @baddieglamaccessories LIZ 😍 @dynamiteko top @dazzledmv and jeans @thevision414 and shoes: @louboutinworld
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15. Big Hair and Optical Illusions #OceanDrive #MiamiLiving #coverparty
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16. MAMA and THE SAVAGES ... ⚓️ #supportyourlocalgirlgang
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17. From the bottom of my ❤️, thank you new followers & old! & hello fellow night owls! #grateful #racheltrue #naturalhair #curlyhair #curlygirl #healthyhair
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18. I feel so grateful because I met these amazing young minds, visiting from Houston TX, during their college tour stop today at #usc.These students are ALL extraordinary and embody academic excellence so I'm humbled to have shared a few moments with them to applaud and celebrate their bright futures ahead! Thank you @EmergeFellows for inviting me to speak and blessing me with your love and attention this afternoon!
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19. Happy Fathers Day Pops. U taught me how to be a man. Lessons of love, hard work & gratefulness. Sorry the fishing didn't stick. LOL. I Love U!
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20. Sky Zone and Ice Cream! Best Fathers Day Ever!! Photo credit @mariahcarey
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21. Look what finally came in the mail 😎 #mtvmovieawards2016 💥+🌽! #straightouttacompton
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22. Claudia Jordan: ....
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23. 'Member that time I almost knocked a bajillion dollar camera off the car? Really? Yeah, me neither! #Greenleaf Episode 2 comin atcha!
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24. Full of love. #birthday #Cabo
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25. Oh hey! Look who just joined Snapchat
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