Correction: Fair Isaac Corp., the credit rating company, says it has no plans to include social media data in compiling FICO scores. Fair Issac says a Kansas City Star news story that stated that social media activity would be considered misinterpreted comments made by the company. The story ran Nov. 5 print edition of the Idaho Statesman. Read Rosen’s follow-up column.
FICO, one of the nation’s largest credit rating companies, recently expanded the ways it tests a consumer’s creditworthiness, including looking at information posted on social media sites such as Facebook.
The company, creator of the FICO credit scoring system, is also looking at sifting through smartphone records, according to various media reports.
“If you look at how many times a person says ‘wasted' in their (Facebook) profile, it has some value in predicting whether they’re going to repay their debt,” FICO chief executive Will Lansing told the Financial Times newspaper.
Creepy? Indeed. But hardly surprising when you take a step back and consider all the ways big data searches have been creeping into our daily lives and seemingly invading our privacy.
“These posts can come back to haunt you,” said Bill Hardekopf, publisher of the LowCards.com credit card information website.
Generally, the new technology allows a credit rating company to search for certain key words, phrases and slang terms for drinking and partying — like getting smashed, trashed and wasted.
FICO has noted that the new credit assessment tests are not fully intended to negatively impact a person’s credit score. A clean image on Facebook, for example, might actually help a person get credit.
Still, I don’t like the idea of tapping into public Facebook comments, given that young people are often prone to doing stupid stuff on social media. It’s just one piece of the snapshot, but does it make them credit risks?
What can parents do? Have that conversation with your young borrower about being both educated and on guard when it comes to using social media and who might be lurking.
Steve Rosen is assistant business editor at The Kansas City Star. Email: firstname.lastname@example.org.