Loans and Social Media

Lenders learn a lot about you before they approve your loan—they examine credit histories, pay stubs, bank statements—but that might not be all they look at in the future.  According to The Wall Street Journal,some lenders, mostly dealing in small-business loans, are combing through applicants’ social media accounts and status updates, tweets, and posted résumés.  It might not be a simple fad. The Journal reports that FICO is looking into the possibility of using social media to determine creditworthiness. If this idea takes root, your mortgage lender might be next to peruse your Facebook profile.  Considering how long social networking activity stays online, it’s a good idea to prepare now before a forgotten check-in tanks your approval chances. Here’s what you should—and shouldn’t—do:

Don’t Rely on Privacy Settings

Setting your account to “friends only” isn’t enough to keep unwanted lenders (or anyone else) from seeing some of your social networking activity. Many of these sites update their privacy settings and terms frequently, and if you don’t keep up, you might find your personal information available for anyone to view.

Don’t Complain about Work

Bragging about playing hooky, complaining about your workload or ranting about how much you hate your boss online could come back to haunt you. If potential lenders see these posts, they may think your employment isn’t as stable as you say.  If you want to discuss your job on social media, keep things positive and don’t brag about skipping out of work—even if a lender never sees it, your boss might.

Don’t Post about Finances

If you’re having financial trouble, it might be tempting to write a quick status update and crowdsource your friends and family for advice, but lenders may not have the full context. This might lead to their investigating whether it was a one-time problem or part of a pattern, and that could hurt you.  You’d be better off discussing temporary setbacks with friends and family in person, and keeping the conversation offline.

Do Update your Résumé

Your lender may check your LinkedIn profile and job search sites such as Monster to see if your online résumé matches what you submitted on your application. The catch here is that some people create a profile once and never update it again. This could lead to confusion with your lender.  Before you apply for a loan, make sure all of your résumés are up to date and include your current employer and job title.

Do Build a Strong Social Network

You shouldn’t completely shy away from social media. If you have a strong online presence and a lot of friends or followers, that could actually help your loan application. Lenders like to see that you’re a trusted, established and well-liked person, so go forth and build your social network.

Do Brag about Good Service

If you’re  self employed or own a small business, social networking could bolster your loan application, especially if you have good reviews and high ratings. After all, if your business is doing well, your income will likely be on the rise.  Update your business accounts on social networks, reach out to customers and encourage reviews across several sites to build a good reputation.

-From The Wall Street Journal