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Lenders Screen Borrowers via Social Media

Watch What You Post: Lenders Screen Borrowers via Social Media

In many ways, social media has made it easier for us to communicate with each other. We can effortlessly have our family members informed about what’s going on in our lives and even keep in touch with friends from around the world. However, this new convenient way of interaction comes with a big caution: your privacy.

Whenever you’re using a social media platform like Facebook, Twitter or Instagram, you’re leaving an online trail for an unknown audience. Since social media is a public space, anyone can get a glimpse of your information. A person is more likely to become a victim of phishing schemes and other unlawful data mining when they have available personal information online.

Social media plays an increasing role in our private and professional lives. However, it’s crucial to keep up with its ever-changing parameters and learn how to navigate it as safely as possible.

Some mortgage companies and upstart lenders are checking borrowers’ social media posts to confirm their identity, job status and gauge their credit-worthiness. To validate eligibility for a loan, lenders screen borrowers by Googling and snooping around their social media pages such as Facebook, Twitter and LinkedIn to look for mentions of debt or spending problems and other alternative scoring metrics. Apparently, this not only helps from a fraud point of view, but also provides a data to dig further and make a better lending decision.

Just as Facebook is being penetrated by potential employers, it’s no surprise that in assessing risk factors, lenders will also use and explore everything available to them, and that includes social media entries.

There is a huge privacy alarm here and this controversial credit-vetting method poses a huge confidentiality issue. This practice has also raised concerns among consumer groups and regulators who are watching the trend and are trying to determine whether to police financial institutions’ use of online data in credit scoring.

Having a decent internet presence is important nowadays and if you’re thinking of applying for a loan or ways to consolidate debts in the next few years, be very careful about what you share on social media.

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