Before you fill out that loan application, you may want to take a peek at your Facebook profile, because even if you don't, there's a pretty good chance your lender will, a new report suggests.
According to CreditCards.com, creditors are tapping into your social networking circle to help determine your creditworthiness. One reason they do this is to look for discrepancies in the info you provide on the credit app versus what your online profile says.
"We use social chatter as a way to bring risk down. It's a wealth of information about a person," says Rob Garcia, senior director of product strategy, The Lending Club. "If a person says he lives in a different area than the one on the application, it could be a flag. But if it matches, it greatly increases confidence."
But what's scary is that lenders aren't just using your social networking profiles to verify information, they're also making a credit decision based, in part, on what you're doing online and who you're doing it with.
"When people have large networks, they get funded two to three times faster than without," says Garcia. "We notice that good credit people invite good credit people, bad invite bad."
According to a report by DigiTimes, Kingston Technology is vouching for memory chip maker ProMOS Technologies and has agreed to act as a guarantor for the latter's application for a syndicated loan worth approximately $148 million. Of that $148 million, which is to be paid by nine local banks, Kingston has reportedly agreed to guarantee somewhere between $44 to $60 million.
Memory chip makers have found themselves in dire straights over slumping memory prices and an unforgiving global economy. The situation has gotten so bad that Qimonda, one of the world's top 10 memory chip suppliers, recently filed for bankruptcy. ProMOS has also been struggling, suffering losses adding up to $675 million in the first three quarters of 2008. Earlier this month, ProMOS submitted its application for a government-led bailout package.