We’ve all heard the warnings about how potential employers can view the social media accounts of prospective employees to determine if they are hire-worthy but did you know that your social media habits might also affect your credit score?
According to an article by Investors.com, credit rating agencies like Fair Isaac Corporation (or FICO) are implementing new strategies for assessing a consumer’s creditworthiness and that includes information found on social networking sites and smart phone records.
The article suggests that by perusing a consumer’s personal social media postings, credit agencies can discern patterns of behavior that may suggest a consumer could be a potential credit risk. According to money.cnn.com, “using ‘big data’ to assess credit risk is on the verge of going mainstream.” Credit companies have come up with software to capture certain key words, phrases and slang terms for drinking and partying and can use those comments about “a weekend of debauchery” to predict whether a consumer is a credit risk. The results could potentially lower a consumer’s credit score.
Protect your creditworthiness by watching what you post on your social media accounts. If you wouldn’t want your mother to read your social media comments then it’s probably not something you should post. Besides embarrassing your mother, you could ultimately be ruining your credit rating. Additionally, parents should have a conversation with their young borrowers about their social media behavior and its potential impact on their future creditworthiness.