Answer: Hard to tell now…but it is coming!

Another reason to watch what you post on social media…

From National Public Radio:

It’s a modern-day iteration of the idea of character as a commercial value: companies going online to try to figure out your financial potential from posts and connections from Facebook, Twitter and, yes, LinkedIn (professional contacts there are “especially revealing of an applicant’s ‘character and capacity’ to repay,” another creditworthiness startup founder told the Economist, in 2013).

The Financial Times started it with this provocative headline: “Being wasted on Facebook may damage your credit score.”

Will Lansing, chief executive of the San Jose, California-based company, said FICO was increasingly looking at data on a spectrum: with credit card repayment history at one end — the most reliable guide to creditworthiness — and at the other, information volunteered on social media platforms such as Facebook.

“If you look at how many times a person says ‘wasted’ in their profile, it has some value in predicting whether they’re going to repay their debt,” he said. “It’s not much, but it’s more than zero.”

In Kansas City Star, FICO walked back from these earlier comments:

Christina Goethe, Fair Isaac’s director of communications, said Lansing was “talking generally about the fact that different types of data have different levels of predictive value” in terms of being a credit risk or not. Goethe said there were several important reasons the company is treading carefully with social media data.

FICO scoring systems have been redeveloped numerous times over the years to keep up with the behavioral trends of consumers, Goethe said, “but changes to the score are made cautiously after exhaustive research.” Unless social media information is “proven unequivocally to be predictive of credit risk, it will not be part of any FICO score,” she said.

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About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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