Your Social Network as a Credit Risk Vector

(via notforpublicconsumption via CreditCards.com)

Pretty much everything you and your network reveal may be compiled, including status updates, “tweets,” joining online clubs, linking a Web site or posting a comment on a blog or news Web site.
“In the past, marketing products to people was primarily done via demographics — age, sex, location, education, etc.,” says Jewitt.

“[Demographic] data isn’t always so accurate, though.” Demographics have given way to multi-dimensional behavioral targeting that allows creditors to draw conclusions about what type of credit customer you may be. The idea is “like follows like” — so if your online friends express curiosity about something, so too may you, whether you say so or not. 

Social graphs allow credit issuers to know if you’re connected to a community of great credit customers. Creditors can see if people in your network have accounts with them, and are free to look at how they are handling those accounts.

“We use social chatter as a way to bring risk down. It’s a wealth of information about a person,” says Garcia, who gives the example of a Facebook user who posts a home address. “If a person says he lives in a different area than the one on the application, it could be a flag. But if it matches, it greatly increases confidence.”