Credit
Score Based on Social Network Data!
A credit score is a number which is
calculated, utilizing some sophisticated
statistical algorithms, based on your
recent (e.g., last two years or so)
payment history, history of managing
your credits and behavior of paying your
loans, credit cards, store charge cards,
bills, obligations, etc. The credit
score predicts the likelihood of a
person’s debt repayment behavior based
on the person’s recent payment history.
Figure 1: Credit Score Analyzer
There are hundreds of companies in the
U.S. and around the world that have
developed their own algorithms to
analyze different sets of data and
generate scores for different purposes.
While lenders may use different scoring
models to determine how you score, and
each major credit bureau has its own
method for calculating credit scores,
the scoring models have been fairly well
standardized so that a score at one
bureau is roughly equivalent to
the same score at another, but are not
necessarily the same.
Not all credit scores are created
equal!
The most popular Credit Scores are: FICO
Score, VantageScore, TransRisk, and Beacon score.
But, I am addressing here some of the
credit score companies which generate
your score based on the analyzing data
from social networks. These are
interesting and not many people know
about them. They are explained below.
Credit
Score Based on Social Network Data!
There are many other companies in the
U.S. and around the world that have
developed their own algorithms to
analyze different sets of data and
generate scores for different purposes.
A few interesting examples are shown
below:
Lenddo
Score: analyzing data from social
networks
(1 to 1000)
Lenddo, a Honk Kong company and other
sites like it, are analyzing data from
social networks and other factors to
reach people who have a hard time
getting loans. Lenddo focuses more on
social connections to judge the
customers trustworthiness.
Lenddo Score (1 to 1,000)
·
Number of followers
·
Background of peers
·
Education and employers
·
Repayment history of friends
Neo Finance Inc. Score: Based on actual
income and social data (LinkedIn
profile).
Neo Finance Inc., of Palo Alto, Calif.,
offers car loans to U.S. consumers based
on their actual income and social data.
Neo, which claims to save its consumers
as much 50% in interest costs, targets
young adults who may not have
comprehensive credit histories but will
likely be high earners in the future.
The company does review a user's credit
report for red flags but doesn't use the
FICO score in its risk calculation.
Instead, the company spends more time
parsing through a person's LinkedIn
profile to determine how long users have
held jobs, the number and quality of
connections in their industry and
geography and the seniority of their
connections.
The company believes: When you look at
that information you start to get a good
sense of job stability.
Affirm
Inc. Score: Based on (Gmail and
Facebook)
Affirm Inc., is a
San Francisco-based startup company.
In order to mitigate the risk of fraud,
Affirm prompts users to connect with
their Gmail or Facebook accounts, which
allow the company to verify the identity
of the user. From there, it scans a
large set of publicly available data
associated with the identity to
calculate an Affirm credit score.
"These signals help us know if you are
who you say you are," The Company says.
The company's algorithm draws on
information from more than 100 databases
and social networks, looking at an array
of variables such as the user’s
locations and the number of personal
connections.
Resources:
To get more information about credit
scores and tips and tricks on how to
improve your score, please see my book
at:
http://www.texasfivestarrealty.com/Credit_Score_Book.asp
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