Banks Checking Tweets, Facebook Statuses for Credit Risks

Florida Real Estate Tweet: That status update about being underwater on your Florida home could make it more difficult to secure credit in the future.

We already know it’s possible to get fired for the things you post on Twitter and Facebook. Now it seems your status updates may one day impact your credit too. In a recent Mashable article: What Banks and Lenders Know About You From Social Media reports indicate banks are data mining social profiles for clues about the financial situation of current and potential customers.

The earliest we’ll see banks and lenders begin to act is five years down the road, once they’ve had time to evaluate and correlate specific social media behaviors to actual credit risks. For example, tweeting about walking away from your home may translate as an indicator that you may be delinquent on a future loan. Now banks are doing the math to determine whether these kinds of comments or tweets actually prove true down the road. – Mashable’s Ken Li reported.

Anything you do online can be traced back to you. However, you can cut down on the amount of information accessible to the bank on your social media profiles.

* Stay on top of your privacy settings. Facebook is the biggest offender when it comes to exposing user information. Check your settings on a continuous basis to ensure that people only see what you want them to see.

* Think about what you are sharing. As many people have learned over the years, what you say online today can come back to haunt you later. Some things are probably better left unsaid.

But social media monitoring isn’t the only way banks are keeping a close eye on your financial health. Using a variety of tools at their disposal, credit bureaus are able to estimate your income. Since the Federal Reserve requires lenders to look at income to ensure applicants can repay their loans, banks are including this estimate in their credit decisions.

Florida homeowners need to take care because banks are also taking a peek at your home’s market value. If you are underwater, like many Florida residents are, banks may be hesitant to approve credit card or loan applications for fear they will be unable to collect from your tangible assets if you default.

Even your bank deposits may come under scrutiny. Any changes, such as a reduction in income, can cause red flags and result in a denial of credit. At the end of the day, this simply means you must be extra vigilant online and offline if you want to protect your credit reputation.

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