SOCIAL MEDIA USED IN CREDIT EXTENSION

SOCIAL MEDIA USED IN CREDIT EXTENSION

By Patrick Ingegno

If your credit lines have been reduced or you are unable to obtain that auto loan you want don’t blame yourself or your sub-prime FICO credit score blame your Facebook friends.

There is a new company, with offices in NYC, which compiles data from social media sites to help determine your credit status. It seems that if your Facebook friends pay their bills than you have a better chance of paying your bills.  The Company, Lenddo, describes itself as the world's first online platform that helps the middle class use their social connections to build their creditworthiness and access local financial services; wow, that sounds really noble and very magnanimous.  Makes you wonder, doesn’t it?  Lenddo claims that their members can use their reputation on social media sites like Facebook, LinkedIn, Twitter and Yahoo to “obtain life-improving loans” that can be used for education, healthcare, home improvement or to start your own business.  From what I have seen posted on many social media sites, many people’s reputations could use a real facelift.  If anyone was to compile that info it would seem that any serious lender would balk at extending credit to anyone who Tweets that they “burnt (their) toast” or spent last evening drinking excessively at a local bar.

Too much information is a dangerous thing, in the wrong hands.  A recent story in the NY Post described the situation in which a middle aged doctor finds himself.  Although he is a well paid medical doctor with a previously spectacular credit reputation he is unable to obtain even a secured auto loan because one credit bureau erroneously posted $22 million in debt, that doesn’t belong to him, on his credit bureau.  His credit report is now more than 50 pages long and included over 45 mortgages with multi-million dollar foreclosures.  The debts listed on his credit bureau are for people with similar, but different, names and social security numbers.  Despite obvious errors the credit bureau refuses to clear the report and the doctor has been forced to file suit in Brooklyn Federal Court.  I wonder what his Facebook friends would say about that!

Credit is a privilege both for those who extend it and those who use it.  We all must be extremely vigilant in protecting our personal information across all avenues of media.  In this writer's humble opinion there is very little validity in using someone’s social media connections as a factor in extending credit.

Patrick Ingegno can be reached at inner-circle@optimum.net or www.innercircledebtsolutions.com