The more that we base upon networks – size and composition of networks – the more inequality we produce. I know they mean well, but this will give advantages to the well-connected without helping the unconnected. I’m not sure that’s a good thing. There is actually something to be said for starting on the same platform – of no credit – as most other young people and working to build good credit, for example. If knowing the right people or the right kind of people puts you at an advantage, then socio-economic mobility could potentially suffer even more than it already does suffer at the hands of nepotism and networking.
I play that game, but I don’t like it.
All sorts of stuff factors into your credit score: How many credit cards you have; whether or not you’ve paid bills late in the past; the age of your oldest account; what types of loans you have; whether you’ve maxed out your credit cards; and so on.
But a handful of high-tech startups now see an opportunity to sift through mountains of other data about you, including some drawn from your social media profiles, to determine whether or not you’re the type of person who’s going to pay back a lender or not. And you’d be surprised what kind of information can have an effect. Are you the kind of person who “shouts” in all caps or never bothers to capitalize at all? How many friends or connections do you have? And even: Are you the type to fire off negative or racist commentary?
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