If you need to get a personal loan facility, should you worry about the things you say and do when you are on social media? Absolutely!
In today’s world in which almost 2 billion people live the rest of their lives on various social media platforms, credit firms most of which are now operating entirely from online offices are redefining what creditworthiness truly means. For most of the firms including banks, submitting physical documents and the quality of collateral is not entirely what makes an individual creditworthy.
Data derived from social media, for many of them, gives a more clearer picture of who a potential debtor truly is and his capacity to pay back the loan. In essence, what they see on your profile or page can influence their final decision.
To underscore this growing trend, in 2015, Facebook bought a US patent that would let a lender analyze your Facebook friends when you apply for a loan. If too many of your friends have poor credit histories, a lender could reject your application – even if your own credit was good. On the other hand, if the average rating was at least a minimum credit score, your loan is more likely to continue through the application process.
In Nigeria, credit services firms such as SocialLender are heavily reliant on your social media activities in order to make their decisions about granting your application.
It is important to know how important this is so you can begin to correct some wrong impressions you may have built as a result of the manner in which you relate on social media. When you apply for loans in some financial institutions, one of the provisions could be that you should provide them with your social media profiles. So what exactly will they be looking for?
While on social media, one of the first things a lender wants to establish is your true identity and your employment status. The second thing they are looking for are possible red flags that shows irresponsible spending or fraud. The red flags could come in the way you talk, write or spell your words. Something as simple as typing your words in capital letter may indicate your earning power or education is not good enough hence it makes you unsuitable.
Some lenders also aggregate your friends’ behaviours and interpret as a mirror of your behaviour on the belief that people typically gravitates towards likeminded people. If you are the type that ‘likes’ or ‘shares’ pictures or posts from friend who are into gambling or unstable financial situations or lavishes money on expensive materials, the interpretation might impact your reliability.
A practical test of how a lender might see you is when you click on the ‘View as’ on your Facebook profile – not your Facebook wall. Interestingly the page is introduced this way “This tool lets you see what your Timeline looks like to the public or a specific friend. Remember: Things you hide from your Timeline still appear in News Feed, search and other places on Facebook.” In other words, a lender sees everything about you including the ones you intend to hide.
Arguably lenders most preferred social network is LinkedIn because of the ability to capture in a glance through the profile whether a potential debtor is job secured or unstable. This is particularly true when it is a business loan. The lender can also determine how frequent a borrower changes job or how long they have been on a career path.
How do you improve your social media credit standing?
The first is to be try to see your profile from the lenses of the lender. This will in turn take you to the next step where you will delete questionable posts that might impact negatively on your score. We also recommend beefing up your social media presence and this includes the pictures you use for your profiles. Avoid putting information that you cannot substantiate or are false. Let your posts be accurate. Regular post on your social media walls can also boost your credit standing.
FRANK ELEANYA
