Like much of the rest of the civilized world, credit card lenders are catching on to the endless possibilities of social networking. But rather than reconnect with old friends, more and more companies have ulterior motives as they browse through users’ information. They are using sites like Facebook and Twitter as a means to evaluate card applicants.
The reason? There is a certain school of thought that subscribes to the idea that a person should be judged by the company he keeps; in other words, if your profile contains suggestive or questionable pictures of you or your friends, or any other information that might be considered off-putting, lenders may see you as a credit risk and deny your application. They may also discover facts about your life in which you were not as forthcoming about on your application for a loan or line of credit.
These companies aren’t running credit reports or background checks (officially), but anything a creditor might find that constitutes a risk may end up costing you your shot at a credit card. Essentially, if it looks as though you run with a group of less-than-stellar credit card holders, that could reflect poorly on you. Sound like “guilty by association”? Possibly. “Invasion of privacy”? Maybe. “Unfair”? That depends.
Public Information is Public
Understandably, these practices haven’t earned many fans. Some social networking industry professionals argue that these lenders are taking advantage of users’ ignorance of how their information may be collected and possibly used against them. Others argue that “checking” applicants is borderline spying and credit companies shouldn’t be evaluating applicants based on information they collect through social networking sites. They say that credit card companies should only accept or deny an applicant based on the information they receive from the applicant. Although there is some truth to the fact that people tend to have friends with similar personalities or behavior, this certainly isn’t true for everyone. It seems a bit unfair to judge a person based on their “friends” and social networking information alone.
Reducing the Risk to Increase Bottom Lines
Credit card companies these days are increasing measures to weed out the risks and limit lines of credit to save their own profit margins. The use of social media is just one more coal added to the fire. Applying for credit may not seem to you like an all-inclusive search and destroy mission but if you are acting not as appropriately online as you are expected to act, you may not be all that surprised when you are denied credit. Risks in the credit card industry were recently at an all time high with many card holders declaring bankruptcy or having defaulted accounts. Don’t be fooled by what you think is ‘private socializing’ when the person who is watching you has the power to deny you credit.
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