Most Facebookers (noun. A person using the social networking website Facebook) know that “friending” someone can enhance or soil a personal reputation. Companies use social media regularly as part of the hiring process. A person’s online reputation may be the difference between getting hired and losing a job opportunity.
Recently it was discovered that Facebook patented technology that could allow lenders to use a borrower’s social network to determine whether he or she is a good credit risk.
The technology averages the credit ratings of the borrower’s Facebook friends and provides this score to a lender for consideration of the borrower’s credit application. The patent states: “If the average credit rating of these members is at least a minimum credit score, the lender continues to process the loan application. Otherwise, the loan application is rejected.”
This is the ultimate example of “guilt by association” that your mother always warned you about.
Facebook has not commented regarding this technology, and it is not clear whether it will ever be used. The federal Equal Credit Opportunity Act strictly regulates what criteria creditors can use when deciding on a loan — things like income, expenses, debts and credit history determine creditworthiness.
For now, it may be prudent to consider the possible implications (and future risks) of friending someone on Facebook. That’s not just good advice — it could make a huge difference to your future financial success.
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