What’s Your Social Credit Score？ [Infographic]

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<img alt=”How is Your Social Credit Score Calculated?” src=”https://www.webfx.com/blog/social-media/social-media-credit-score-infographic/”><br /><br /> Created by <a title=”WebFX” href=”https://www.webfx.com/blog/social-media/social-media-credit-score-infographic/”>WebFX</a>Research conducted by The Wharton School at the University of Pennsylvania indicates an increasing trend among credit institutions to utilize social media data in evaluating the creditworthiness of borrowers. Among the financial institutions embracing this approach are Kabbage, Neo Finance, Wonga, and Kreditech.

Wondering how your social media behavior impacts your creditworthiness? Here’s an insight into the process: suppose you apply for a loan with one of these four entities. They will initially review conventional criteria, such as your FICO credit score, employment status, and debt levels with other lenders.

In cases of red flags or insufficient credit history, lenders tend to scrutinize your public online presence, including social media profiles, to gauge the level of risk you present. The lender will form an assessment based on the information available to the public. Typically, an individual with a substantial social media following, strong professional connections on LinkedIn, and public posts about recent career advancements is viewed as a lower risk.

Conversely, an applicant without a LinkedIn profile, a Facebook presence dominated by party-related posts, and a patchy work history is less likely to secure approval. Furthermore, if you’ve recently vented about a job resignation or confrontation with a superior, it’s likely that you’ll face difficulties in obtaining a loan.

Should you be concerned about lenders evaluating your social media activity for loan or credit line approvals, consider the following advice:

Review your privacy settings before sharing sensitive information or portraying yourself negatively.

Avoid posting content you might regret later. Is every tweet about your grievances truly necessary?

Maintain up-to-date job history and information. An inconsistency between your application and the data you provide can lead to disqualification.

Nurture a selective social circle. Lenders may cross-reference their databases to check if they’ve previously lent to your social media contacts. Consider severing ties with acquaintances with poor credit history.

It’s crucial to remember that your social media activity isn’t just under scrutiny by lenders. Employers, industry leaders, competitors, and even family and friends can easily access your online behavior and assess your activities or opinions. Before sharing personal details online, ask yourself: “Is this information necessary?” If the answer is “no,” it’s advisable to keep it private.

This approach will not only maintain a high social credit score but also enhance your online reputation, benefiting you in various aspects beyond loan applications. Photo Credit: Fosforix, Marc Wathieu