Turned down for a loan? Blame your Facebook friends

Turned down for a loan? Blame your Facebook friends

Turned down for a loan? Blame your Facebook friends

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by CNN

KMOV.com

Posted on October 15, 2013 at 3:30 PM

NEW YORK (CNN)- If you have been denied for a loan, you may have your Facebook friends to thank.

A handful of companies are now using social data to determine the risk of lending to people who have a difficult time accessing credit.

Traditional lenders rely on credit scores and steer clear of people without a credit history.

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However, other lending companies say social connections could be the key to finding out a person’s creditworthiness.

Lenddo determines if you are friends on Facebook with someone who was late paying back a loan.

The company uses the data from your friends to determine who you tend to surround yourself with, meaning you may be more likely to be like them when it comes to paying bills on time.

However, some in the financial industry are skeptical about social data because it is not indicative of the applicant’s history but rather their friends.

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