Can having the wrong friends online affect your credit rating?
I understand the idea behind marketers identifying users who have a lot of friends or are very active online and considering them “influencers”. I “get” the marketing value of enhancing a users profile with information from a range of their online public activity. Providing transparency to users and control over this type of data collection is certainly a challenge, but with enough effort and care about how the data is used, it should be possible to design an ethical framework for responsible practices for social network data use.
But I think this story about lenders being pitched the idea of my social network friends being used to influence my credit is a very, very bad idea. This is the kind of idea that convinces lawmakers and advocates that the entire behavioral advertising business model is unacceptable. I hope Rapleaf will rethink this one.Did blogging about this just adjust my network behavior credit score?
Rapleaf, which has harvested data from blogs, online forums, and social networks, says it follows the network behavior of 480 million people. It furnishes friendship data to help customers fine-tune their promotions. Its studies indicate borrowers are a better bet if their friends have higher credit ratings. This might mean a home buyer with a middling credit risk score of 550 should be treated as closer to 600 if most of his or her friends are in that range, says Rapleaf CEO Auren Hoffman.
Such intelligence could prove useful for a financial company. While no one would automatically green-light borrowers based on their friends, the friendship data could lead them to assign a human to see if the mathematical model is missing something. “They pay more than $100 in marketing to [attract] customers,” Hoffman says. “If they reject you, they lose it.”