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How Your Social Media Score Will Shape Your Life Options:
On the intertwining of social capital and literal capital, the Economist reveals:
Facebook data already inform lending decisions at Kreditech, a start-up that makes loans in Germany, Poland and Spain. Applicants are asked to provide access for a limited time to their account on Facebook or another social network. Much is revealed by your friends, says Alexander Graubner-Müller, one of the firm’s founders. An applicant whose friends appear to have well-paid jobs and live in nice neighbourhoods is more likely to secure a loan. An applicant with a friend who has defaulted on a Kreditech loan is more likely to be rejected.
An online bank that opens in America this month will use Facebook data to adjust account holders’ credit-card interest rates. Based in New York, Movenbank will monitor messages on Facebook and cut interest rates for those who talk up the bank to friends. If any join, the referrer’s interest rate will drop further. Rates and fees will also drop if account holders spend prudently.
Perhaps no company has gone as far as Lenddo, a Hong Kong start-up that owns online lenders in Colombia and the Philippines. Loan-seekers ask Facebook friends to vouch for them. The credit scores of those who have vouched for a borrower are damaged if he or she fails to repay.
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