Non-traditional credit data: Did you know your Facebook posts and browsing history could be used to help build your credit score?
Credit scoring doesn’t just apply to your loan history anymore – your financial profile could rely on data such as Facebook posts, purchase history and even your search history.
That’s according to TotallyMoney.com, which warns that the credit industry is changing and is looking to alternative data sources to build loan-seekers’ financial profiles.
The credit comparison site says that while Google develops artificial intelligence and BMW speculates about crash-proof motorcycles, the finance sector is honing in on one of the world’s biggest markets: social networks.
It reveals that, from Facebook posts to location tracking, call history and browsing history, the way we use technology to interact with the world around us is now becoming part of how we’re evaluated for loans and credit cards.
Transaction history and identity verification
While it might be an obvious first call to make sure loan applicants haven’t posted on Facebook about how much debt they’re in, TotallyMoney.com says you might not guess some of the other ways a financial profile can now be built…
Phone contacts – not the hour-long chats with friends and family; your contact list is used by Branch and Tala Mobile to see if other finance companies are commonly called
Purchase history – another reason not to make impulse purchases on Amazon, some companies are checking out previous acquisitions to see how responsible you are with your income
Fraud checking – online profiles are a good way to test whether someone’s real or not. Lenddo, Moven and Kreditech have all made progress in mining them for data to protect against fraudsters
GitHub contributions – everything can be used as data for finances, even contributions to coding libraries. So says Max Levchin, founder of Affirm (and co-founder of PayPal)
Language processing and psycholinguistics – sounding more science fiction than finance technology, Hello Soda’s PROFILE system looks at internet footprints from a psychoanalytic standpoint
TotallyMoney.com says the Chinese government is even planning to institute a nationalised social credit scoring system by 2020.
CEO Alastair Douglas said: “The way the credit industry uses data is changing. We believe everyone should have the best information available when it comes to credit eligibility scoring – and that means staying on top of the latest methods and technology.”
It seems social media, phone usage and browsing history are all part of the financial profile of the future.