Just when you thought the worst part of social media is that it takes up all your free time, a new study says it can do much worse.
According to a recent report on CNN Money, some new tech firms are trying out ways to determine credit worthiness by checking the debt and credit habits of friends on Facebook.
Several companies in this country, as well as in Europe, have been creating algorithms to determine the financial habits of your circle of friends.
The theory is you associate with people who are like you. If your friends have bad credit habits, then you might, too.
“New tech firms are trying to determine
credit worthiness by checking Facebook.”
“It turns out humans are really good at knowing who is trustworthy and reliable in their community,” said Jeff Stewart, co-founder and CEO of Lenddo, a firm developing the algorithm. “What is new is that we are now able to measure this through massive computing power.”
There are no credit reporting agencies currently using this practice. Also, most of the services are small and operate in countries other than the U.S.
Big data is referred to as the vast amount of information available to consumers, and it is a growing trend.
For those of you who watch your credit scores and credit reports, it may be worth your time to watch your Facebook friend lists as well.
Source: cnn.com. Photo: networkflex.com.