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Business News/ Special-reports / Native-content/  How your social media behaviour can affect your loan
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How your social media behaviour can affect your loan

New algorithms can easily scan a large chunk of a person's online data, and assign a personality score which can be used to ascertain his/her reliability

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Loan eligibility was based largely on your credit score, credit repayment history, age, work experience, and income. As the world progresses, social media has come to play an important role in society. Banks and financial institutions have also entered the realm of social media with products and services like wallets and fund transfers. The importance of the internet and social media has grown even more as now chances of getting a loan could be based on your online behaviour.

Online lenders of the new age are now scrutinising social media tracks of applicants. Behaviour such as trolling and stalking could jeopardise your chances of getting a personal loan. Currently, independent lenders and online credit portals have branched out into diligently researching a client’s behaviour not just through their bank statements and pay slips, but also through their online footprints.

What exactly can these algorithms spot?

New algorithms can easily scan a large chunk of a person’s online data, and assign a personality score which can be used to ascertain a person’s reliability. They can be used to find out if an applicant lives beyond their means, indulges in high-risk behaviour or activities, and much more. This can help lenders determine whether the applicant is low-risk or high-risk when it comes to repaying the loan.

What tracks are you leaving behind when you are online?

Unless you are super careful about your search history, private browsing and what gets stored online, pretty much everything is captured. From your search engine history, your shopping preferences, the ads you click on, the sites you visit, to the things you hashtag, the places you check in online, the friends you tag and socialise with, everything is stored somewhere online. It’s basically information overload.

Is it invasion of privacy?

You would think that this could amount to invasion of your privacy, but you’d be sadly mistaken. At some point or the other, we have all signed off on our personal information when we’ve subscribed to a website, registered online, or downloaded and installed an app. There are a million quizzes, games, and apps on Facebook that require access to your personal information, and we all happily grant it to gain access to it. We also give away our contacts stored on our mobiles, access to our camera and photo albums, and other information when we open certain apps. Simple photo editing apps, make-up apps, and much-loved games use personal information granted by us.

Plus, the lenders are not storing any of this data to use it against you. They simply run algorithms that sweep through all the data available online and give the lender a score to help them arrive at a decision. The lenders also do not read personal text messages. However, transaction alerts sent by banks and e-wallets can get picked up. If you’ve spent excessively on your credit card, you might be noticed not just through credit scores, but through these alerts as well.

What about your family and friends?

Lenders can also be aware of who your friends and family are without you ever telling them. If you’ve been rejected for a loan and you try to get the same one through a friend, your spouse, boyfriend/girlfriend or any family member, chances are the lender can spot the deception. The method is simple. They can find out who is transferring money to whom and how frequently. They can also see the loan amount applied for. Once you’ve been rejected - for a credit card default maybe - the bank will be aware if a relative, spouse or partner applies for the same loan.

What should you do?

Be aware of the situation of the world today and the advancements it has made. We are no longer entitled to privacy unless you choose to live a life offline. If you choose to create an email account, an online bank account, a social media account, chances are a chunk of your privacy has already been signed off. If you choose to use mobile apps, computer apps, online shopping sites, and other sites, chances are an even bigger chunk of your privacy will be gone. What are the things that can get you into trouble? These things need not necessarily mean trouble, but it could mean you are living beyond your means. It could indicate reckless behaviour, and so on. Here are a few things on social media that could spell trouble when it comes to a personal loan:

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■ Posting everything about yourself online

■ Checking into every place you visit

■ Checking into airports every time you travel

■ Stalking people online

■ Trolling and making fun of people online

■ Ranting about your personal frustrations

■ Posting in favour of dangerous/illegal activities

Here are the things you can do to ensure you are not rejected when you apply for a personal loan:

■ Be careful about what you post online

■ There are methods to delete your Google search history

■ You can also access the data stored online and delete it

■ Be sure not to take out your frustration online

■ Don’t be mean to people online; in other words, don’t troll

As we go more and more digital, just repaying your EMIs and credit cards on time is not enough. Taking a few steps to ensure you leave a good footprint online could make a difference in getting a personal loan approved. Currently, few lenders in the market use these strategies to determine a person’s credibility when approving an unsecured loan. But, this may come into play with banks as well when they approve secured debt like home loan applications, as social media plays a huge role in the lives of many people, especially millennials. In the near future, it could mean much more than just getting a personal loan as more and more institutions and companies turn to social media and online patterns for help.

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Published: 05 Feb 2018, 04:17 PM IST
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