The Wall Street Journal
January 9, 2014
More lending companies are mining Facebook, Twitter and other social-media data to help determine a borrower’s creditworthiness or identity, a trend that is raising concerns among consumer groups and regulators.
Lending companiesâ€”some of which are backed with venture funding from Google Ventures, the venture-capital arm of Google Inc., and Accel Partners, an early Facebook Inc. investorâ€”are looking at potential problems such as whether applicants put the same job information on their loan application as they posted on LinkedIn, or if they shared on Facebook that they had been let go by an employer. A small business that draws negative reviews on eBay also could undermine its chances of getting more credit, lending companies say.
The practice is being used largely by start-ups that grant smaller loans, but the concept seems likely to spread. Fair Isaac Corp., which provides the credit scoring used in more than 90% of lenders decisions, says it is weighing possibilities for incorporating social media.