It’s been a tough go for people with bad or no credit. For years, getting a loan for a car, approval for a credit card, or other types of credit have been subject to a credit score based on your payment history, debt-to-income ratio, and other factors like how long you’ve held your job. But now, two of the biggest credit agencies, FICO and TransUnion, are now working on new scoring models that could help or hurt your ability to get credit based on an entirely new set of criteria.
Facebook is one indicator that’s being considered in this new test. According to the Financial Times, FICO claims that certain types of posts on social media can give indications about someone’s creditworthiness. There is a correlation between the number of times the word “wasted” appears on someone’s Facebook profile and their ability to pay their debts in a timely manner.
And that’s not the only thing they’re looking at. Utility bills, phone bills, and other types of payments not traditionally used in scoring models can now be used to help assign creditworthiness to people who previously wouldn’t have had enough information in their credit histories.
This could be good and bad. On one hand, it offers hope to those who are just starting out and don’t have deep histories of payments for credit agencies to assess. On the other hand, things you once thought were shared just between Facebook friends could come back to haunt you. For many people, it might make sense to go through those social media histories and clean up questionable posts before it’s too late.