The company claims to be “the first credit scoring service that uses your online social network to assess credit”and while only available in the Philippines, it raises some interesting questions.
When you use the site, the first thing Lenddo asks for is a Facebook account; once that’s logged in it also asks for things like Gmail and Twitter. The idea is that where traditional credit scoring isn’t available (in developing economies, for example) this provides a better way of assessing credit. It takes into account not just your content, but the people in your networks and their own financial track record.
And if you fail to keep up repayments then don’t expect to keep it quiet. In the T&Cs the site warns “if you fail to repay your loans or are late on repayments, we reserve the right to lower your credit score, notify members of your network and reduce the credit score of those who referred you.”
Apparently the company has already had enquiries from established banks and it would not be hard to see it becoming part of standard credit scoring. Suddenly your access to benefits, store cards and a mortgage might be affected by the actions of people who follow you on Twitter or you went to school with, but haven’t met since.
Once again, it reinforces that the best way to protect your privacy online is to control what goes online in the first place. If the financial decisions of your friends online starts impacting your own ability to get credit, it would be a much more tangible reason to question the underlying motivation of social networks and how they value our privacy.