With 81% of Americans having a social media profile, you may wonder if social media insights can be used to assess credit risk. When considering social media data as it pertains to financial decisions, there are 3 key concerns to consider.
- The ECOA requires that credit must be extended to all creditworthy applicants regardless of race, religion, gender, marital status, age and other personal characteristics. Social media can reveal these characteristics and inadvertently affect decisions.
- Social media data can be manipulated. Individuals can represent themselves as financially responsible when they’re not. On the flip side, consumers can’t manipulate their payment history.
- When it comes to credit decisions, always remember that the FCRA trumps everything.
Data is essential for all aspects of the financial services industry, but it’s still too early to click the “like” button for social media.
Make more insightful decisions with credit attributes>
