You may be hooked into social networking to stay in touch with friends or promote your business, but did you know your online social activity could impact your chances of a credit approval?
Social networking has seen steep increase in usage over the last few years. In fact, about 67% of all online users have an account with at least one popular social network, such as Facebook, Twitter, or LinkedIn. With such astronomical numbers, marketers are having a field day using available data to offer credit products to consumers.
The Company You Keep Could Impact Your Credit
Although your social activity has no impact directly on your credit score, your visible activity can clue credit card companies about your likes and dislikes and the type of people you have as friends and acquaintances. Your visible activity, including all your updates, groups, and comments, can be compared to a social graph, which is comprised of large amounts of social networking data. Your position can inform credit card companies whether you are connected to a community of good credit customers or poor risks. Their presumption is that your responsibility with credit is predictable to the company you keep.
The Social Networking Debate
However, is it fair for credit card companies to assume risk based on your social activity? Consumer advocacy groups say no. Linda Sherry, a spokesperson from the consumer group, Consumer Action, states, “they may be gaining information from people who are naive and not understanding how their profiles are set. It verges on privacy violation.”
The bottom line is that marketers will use the data that is available to them. With so much social networking data collected, it is possible to spot consumer trends, which makes it a potentially great marketing tool for credit card companies.
Protecting Your Profile – and Credit
Thankfully, there is a way you can avoid being profiled based on your online social activity. Marketers can only pick up data that is public. You can assure that your social activity is not used for consumer profiling by changing your privacy settings on each account.
For instance, Facebook allows you to adjust privacy settings to allow only your acknowledged friends see your activity. Twitter has similar privacy settings.
If you fear that your social activity could be used against you, don’t let creditors have a look at it.
