Do My “Social” Activities Have A Bearing On My Creditworthiness?

For I am a happy dweller of the national capital, the Metro is my preferred travel mode. During peak hours, I have the great fortune of rubbing shoulders — I mean it pretty literally — with fellow lucky residents of the city. The pushing, the nudging and the elbowing also happen to be an integral part of my daily journeys. In the middle of all this, I get to enjoy heart-wrenching sob stories and spirit-igniting humour-loaded banters. Mind you, I am not an eavesdropper, I just do not have a choice in the matter. During one such fun-filled journey, a young person would start telling her friend, whose backpack would give my face repeated friendly pats, how she found out on Facebook (we all know the social media platform, right?) that herfiancé was getting hitched with someone else. My heart started breaking when she added that the estranged fiancé would soon after blocking her account and not allow her the opportunity to take a revenge, on Facebook, in public.

By the time I reached home I was fully convinced that so far I had been underrating the power of social media platforms. I did acknowledge their worth as efficient tools for branding and marketing in the world of sales, but that they had the power to change lives in such a way was beyond my comprehension. Since I have developed the tendency of connecting everything with housing these days, later in the day I would wonder — could my Facebook posts impact me if I am a home buyer?  The answer is, in future, they would most certainly do. But how?

Given a choice, none of us would want to fill so many forms to avail of loans that take a long time to get processed. And, we are happier if someone provides us with a quick loan. As a result, popular Western concepts such as pay-day loans and peer-to-peer lending are gaining traction across emerging economies, India included. While peer-to-peer lending, also known as P2P lending, enables individuals to lend with (without?) the interference of financial institutions, pay-day loans are small amounts that you borrow for a short period, often for a month, and return the money as soon as your salary reaches your account.

These personalised methods allow you easy access to funds while making the process convenient for the parties concerned.  According to experts, these concepts are already becoming popular among Indian consumers.

But, the personal nature of the transaction poses many risks, too.

All the paperwork you do when you apply for a home loan from a bank is basically a way to ensure your credibility. Their work does not stop at getting all your personal information. According to experts, banks dig over 70 data sets to decide your credit score, a benchmark that decides your creditworthiness. In India, a 750+ Credit Information Bureau of India Limited (CIBIL) score is considered a good score by a lender.

Now, if I apply for a payday loan, how does my lender decide whether to give me a loan or not? The obvious answer is that a close look at my social media activities would show him the real picture. My Facebook account would tell him what kind of restaurants I dine in; my scuba-diving picture on Instagram would show I love adventure sports; my LinkedIn profile will reveal I have been changing jobs at a great speed; my Twitter posts leave no ambiguity involving my political and social leanings. Based on the findings of all these profiles and accounts, my peer may decide to lend or not lend me.

 In fact, human resource companies greatly rely on data acquired from social media platform while recruiting these days. It is known that we getting a job is quite dependent on whether the recruiter approves of our behaviour on social media. But, who knew our social media activities would even decide whether we can be a property owner or not.

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