Are you one of those people who likes to go out, get super drunk, and then talk about it on Facebook later? If so, you should know that what you say online can now hurt your credit score.
Credit rating giant FICO — creator of the widely-used FICO credit scoring system — recently announced that it has widened the number of factors it looks at when trying to determine how creditworthy a person is. Among those new factors: what you post on social media outlets like Facebook and Twitter.
“If you look at how many times a person says ‘wasted’ in their profile, it has some value in predicting whether they’re going to repay their debt,”
While the move may sound a bit invasive, it really shouldn’t come as a surprise. A growing number of universities are checking out students’ social media accounts as part of the admissions process, and many employers now look at job applicants’ social media accounts when deciding whether or not to hire them. It was only a matter of time before credit ratings agencies jumped on the bandwagon.
FICO has done its best to allay fears about the upgrades to its software. In fact, the company says that the new measures are designed to increase the number of people who have access to credit:
“Using the right alternatives to traditional credit bureau data, lenders can reliably identify millions more consumers who qualify for credit,”
FICO wrote in a report about the changes.
Other companies are following suit. TransUnion, another large credit rating agency, recently launched an initiative aimed at giving more people access to credit by analyzing new forms of data.
While they won’t be creeping through your timelines just yet, TransUnion will be looking at a number of other factors — from payday loan records to DVD club memberships — when calculating credit scores.
According to FICO, roughly 18 million Americans can’t get credit as a result of negative reports in the past; another 25 million have never had credit at all.