DID YOU KNOW that more and more lenders are looking at Facebook, LinkedIn, Twitter, and other social media data to try and determine a borrower’s “creditworthiness”? Now you have a new reason to be careful when posting on social media; with that being said, this is a trend that is raising concerns with consumer groups/regulators etc.
More and more lenders are peeking at various social media platforms to help determine whether or not someone should be considered for a mortgage or small business loan.
Negative online reviews can sometimes be a red flag for businesses seeking loans re updating their current location, and/or opening a new location etc. Positive feedback can also help put lenders somewhat at ease when considering a loan application.
Decisions still rely on traditional factors such as credit and cash flow, but social media is becoming a new source of information too.
A growing social media world has given many businesses, both big and small, a much better and more direct connection with their clients/customers, many use the various platforms to share, interact, and even highlight some of their customers. Unfortunately, interaction also opens businesses up for criticism, and we all know complaints can be very misleading.
One of social media’s biggest challenges is that people can post whatever they want online, and whether it’s valid or not is very difficult for others to verify whether it’s true or not. Being able to discern valid criticism vs someone with a “chip on their shoulder” is the key.
When underwriting an application, lenders can find out all kinds of things on social media, such as…
“true” employment status [via LinkedIn for example]
years in business
THE BOTTOM LINE…
Business owners seeking loans should always be cognizant of their online reputation and be uber aware/conscious of what people are saying about them. Although it can’t be used to make a final decision, it’s still being seen by people investigating their businesses for financial and other reasons. Basically it’s just another tool for the toolbox!
“So many of us let others determine what we are worth. It’s our duty to make that determination ourselves.” | Jonathan Goldsmith