Can your loan be denied for having financially troubled friends ?
If your friends are in the market, can you make a bad payer? Because this is how some of the largest credit and financing companies are doing when doing the evaluation and analysis.
Loans and Financing
Being connected to the internet is undoubtedly one of the most sensational communications inventions ever invented by man. However, these connections that loan applicants have on social media over the internet, can decide whether or not they deserve approval of loans and financing.
It sounds rumored, but it is not. The systematics is simple; if the person requesting the credit has deadbeat friends with a name restriction and is on Facebook for example, their chances of getting the money decrease. It is even worse if relations with these friends are very close and if there is a lot of interaction between them the rating – credit rating falls by half.
“It turns out that human beings are very good at knowing who is trustworthy and secure in their communities,” Jeff Stewart, co-founder and CEO of Lenddo, told CNN that he provided one of those analytical tools. “What’s new now is that we can measure this reliability through the immense power computing is delivering.”
The system works by using Big Data, using a large power of information processing, companies cross data collected from Facebook, Whatsapp, Twitter, eBay, Amazon, PayPal, among many other sites to analyze the potential risk of the applicant, but the method obviously can go wrong.
Currently the German company Kreditech uses up to 8,000 data points to decide on a loan application, this includes social networks, “buying solutions” and even the time the subject spends to fill out the online form – the longer the applicant of the loan reading the clauses, the better.
Another interesting factor is that they can use up to the geographic location of the access that was made the request to know if the requester is spending the time of the company that works to make the request or if it is doing from home.
You must be thinking that I invented this article? If you deceived my friend, this type of valuation is already available in several financial markets around the world, for now, but it tends to spread, even here in Brazil. By the way, Kreditech is preparing to start his services in Tupinikin lands.
Lenddo, for example, operates in the Philippines, Colombia and Mexico and Kreditech began licensing its technology to Russia and the Czech Republic.
And you, what do you think would happen if this credit assessment format came here in Brazil, where more than 65% of the population is going through financial problems?