More companies are popping up that offer social data to help lenders, landlords and other providers gauge your creditworthiness. In other words, they use your online presence to make decisions about your application.
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Your credit score calculates your behaviour with credit using quantitative methods: How long you’ve been late on a payment, for example, or how much credit you have available. Qualitative data, on the other hand, is based on stuff like your social interactions on Facebook. Or topics you’ve searched for online, like payday loans. This gives lenders a whole other glimpse into your life to judge your credit risk.
Credit comparison site TotallyMoney.com explains:
Many of them, including Singapore-based Lenddo and US-based Moven, both established in 2011, and Score Assured, founded in 2015, are looking for keywords — on the basis that if you say ‘drunk’ or ‘party’ too often then you’re less likely to be reliable, negatively affecting your score — but others are going a step further….Hello Soda have developed a technology called PROFILE, which they’re aiming to provide to other lenders. It analyses a customer’s complete social presence, using language processing and psycholinguistics in order to identify life events, dates of pay, location, age and employment, among others, and generate their social credit score…InVenture and Friendly Score skip reading applicants’ posts and instead look at their browsing history and what sites are visited…Searches for ‘payday loans’ or information on debt management stand out as their first ports of call in these analyses, but they will even check out your mobile phone call history, scanning for premium rate numbers and other financial companies.
Other companies look at your browsing history and what sites you visit, the article explains, looking for words that stand out, like “payday loans”.
In China, the government actually plans to implement a social credit system based on this kind of data. There aren’t any stats on how many countries use this kind of data, but the fact that these companies exist show that there’s a market for lenders and other providers who want info on applicants beyond credit scores. If nothing else, it’s something to be aware of as you navigate your own social channels and online activity.