The next time you apply for a payday loan or a small business loan from your financial institution, the application’s success may depend on your Facebook friends, according to the latest patent filings from Facebook.
The social network juggernaut filed for a patent from the U.S. Patent and Trademark Office for a method that could potentially assist in long-term credit and bad credit loan lenders observe the social habits and connections of an application to conclude if they’re eligible for a loan.
Facebook purchased the patent from Friendster in 2010, which was established by Christopher Launt, who is now employed by getinsured.com. It was first identified by Smartup Legal.
A footnote in the patent outlines that when a customer applies for a loan then the lender would be able to peruse Facebook and find out the credit standing of the individual’s social media friends. Therefore, if the average credit rating of an applicant’s connections maintains a minimum credit score then the application would be approved.
“When an individual applies for a loan, the lender examines the credit ratings of members of the individual’s social network who are connected to the individual through authorized nodes,” the patent states. “If the average credit rating of these members is at least a minimum credit score, the lender continues to process the loan application. Otherwise, the loan application is rejected.”
Indeed, this perhaps would be a welcomed addition to the application process for the finance industry. Banks, for example, may add this to their arsenal of metric data for the review process. Some experts say they feel very uncomfortable by this concept.
“We have been exploring this method of determining an applicants trust score for several years now. Our initial data suggest that people of similar wealth and financial status tend to gravitate together. We hope to begin utilizing this as one of several tools to determine a borrowers trust score for bad credit loans by the end of 2015.” – Chris Lions Continue reading