We all know that companies use the personal data we share online in various ways, but what many of us don’t know is how what we share on social media could affect our credit scores.
Credit rating agency FICO and credit-reporting agencies like TransUnion look at all types of personal info and metrics to determine credit-worthiness — but do they look at what we post on Facebook, Twitter and other social networking sites?
How what you post on social media can affect your credit score
A news article that went viral a couple of years ago quoted FICO’s chief executive officer: “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,” Will Lansing told the Financial Times.
The quote was taken by many to mean that credit agencies had the right to use your social media content against you. But that’s not necessarily true, due in part to some important consumer protections at play.
In the United States, we have a number of safeguards that protect consumers from companies that would penalize us for what we post online. Thanks to the Fair Credit Reporting Act, Americans must be told if their personal data has been used to deny them anything from credit to employment or insurance.
That being said, there are a number of companies with international footprints that have begun incorporating social media into their analytics in determining credit-worthiness.
Lenddo, a startup based in Singapore, uses social data and online behavior to gauge consumers financial health. The way the information is applied, though, is to help people with bad credit histories stabilize their financial profiles.
Still, none of us are are totally in the clear when it comes to how our social media habits can affect our financial lives. There are entities that use your social media content against you: They’re called crooks – and they are everywhere, not ready to physically steal from you, but to assume your identity, as well.
What you should never post on social media
Money expert Clark Howard says identity thieves can easily get your personal information because of what you post online.
- Maiden names: “One of the key pieces of personal information that an identity thief needs is your mother’s maiden name. So when you post stuff about your mom with full name information — pictures, details, information about where somebody lives — you are opening up to so many potential problems.”
This can directly affect your credit score negatively because someone who gets enough of your personal information can impersonate you and take out a line of credit.
- Your present location: Another social media no-no is posting about where you are at any particular moment. “Burglars have a field day about what home to go burgle because on social media you’re saying ‘Hey look at us. We’re in Cancun. Aren’t we having a great time?” Clark says.
- Birthdates: Never post you or your families full birthdates. “Never say, ‘Hey today is my 26th birthday!’ So the criminal knows you were born on this day…and they have another key piece in taking over your identity.”
So, if you were curious about how social media could negatively affect your credit scores, now you have it. Even if the credit bureaus aren’t using that information in their calculations, someone else out there may be.