You just bought a new car and are excited to share the news with friends and fans on social media sites like Twitter or Flickr. Or, maybe you just splurged on a luxury vacation and are sharing a public update on Facebook. Whatever the case may be, sharing information about purchases and finances could hurt your chances of getting a loan.
A recent article in The Wall Street Journal explains how more lending companies are turning to Twitter and Facebook for data mining purposes. Lenders have the ability to scan the social media landscape for any information indicating a borrower’s creditworthiness, which means sharing information about your latest purchase might hurt your chances of being approved for more credit.
According to the article, social media activity can – and is – being monitored by companies interested in learning more about applicants. This goes beyond potential employers turning to LinkedIn and Facebook for more information about a potential new hire; companies that are responsible for determining creditworthiness can use data mining practices to find out more about your buying behavior, identity, and borrower risk.
Federal laws currently don’t protect consumers from this type of ‘investigation’, so any company or individual is free to find information about potential borrowers on social media sites. Still, The Consumer Financial Protection Bureau is aware of such practices.
Are lenders actually going to make credit decisions based on a borrower’s social media updates? It’s too soon to tell but current data mining practices used by these companies may encourage consumers to pay more attention to the types of updates they share publicly on social media sites.
Here are some tips for protecting your financial privacy and personal security online:
- Don’t disclose personal information such as your income level or taxes you are paying this year on social media sites
- Think twice about sharing information about recent purchases such as how much you paid for something, a great deal or discount you received, or other details about a purchase
- Don’t share information that you are in the market for buying a house, car, or other high-end item. These updates could connect you with a scam artist or identity thief looking for a target on social media sites
- Never share details about your financial institution or the types of checking and savings accounts you have
- Don’t respond to social media messages related to credit card offers, loan options, or checking and savings accounts. These could be scams and lead you to spoof sites.