Lending Companies Using Facebook to Determine Loans - ABC 8NEWS - WRIC | Richmond, Virginia News & Weather

Lending Companies Using Facebook to Determine Loans

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RICHMOND (WRIC)--As more and more people post their lives on Facebook and increase their friend base, they could be decreasing their chances of getting a loan.

Douglas Alexander, president of Alexander Financial Services in Henrico, says some start-up lenders like Lenndo, Kreditech and Kabbage are now using Facebook to decide if a person will receive a loan.

He says they're clicking onto friends lists for information.

"There are some start-up companies that are using social data to judge if someone should qualify for a loan," he said. "They are checking everybody out to see if they are late or delinquent on payments."

And with each friend lending companies scroll through, they're looking for missed payments with PayPal, eBay, Amazon and other online accounts.

And if they find your friends haven't paid up, it could be a strike against you.

"It's almost like guilty by association," he said.

Alexander says while everyone needs to be concerned, the ones most at risk are the 50 million Americans without a credit score.

Lenndo defends its practice of scrolling through your friends.

CEO Jeff Stewart says it can actually help the 50 million Americans without credit get a loan.

"Who you associate with and especially who within your community is willing to be a reference for you is an incredible predictor for repayment," he said.

 

Copyright 2013 by Young Broadcasting of Richmond

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