Lenders are no longer looking to your Facebook profile as a metric for creditworthiness, thanks in part to the social media giant’s decision to revamp its data access policies for third parties.
For a time, online banking institutions had lofty plans to use Facebook profiles as a new FICO score, downloading data from your profile to use as benchmarks for your level of creditworthiness. The idea was that this wide-reaching data could tell more about a person’s credit background than a traditional credit score, essentially giving online lenders a leg up over traditional banks, reported the Wall Street Journal.
Facebook even got in on the game for a bit. It secured a patent around assessing a member’s ability to repay a loan based on his or her social network last year. However, Facebook ended up going in a very different direction. As of May, the company opted to limit the amount of information available to third-party services, essentially shutting down online lender’s access to relevant data on members.
The Federal Trade Commission has also made hints that if social media platforms were to use their data for loan criteria purposes, it could then regulate the companies as a consumer-reporting agency. The FTC could also consider expanding what constitutes “criteria,” as well. Expanding the definition to include non-specific information, like social media patterns of people in a given area.
Facebook (FB) didn’t comment to the WSJ on any specific plans related to consumer lending, but the company would likely shy away from additional regulations imposed by the FTC.