You're already concerned about your credit score; one day you may also have to be concerned about your Facebook friends—because a few tech startups are using social data when determining whether to loan you money. Lenddo checks out whether your Facebook friends list includes anyone who's ever been late paying back a Lenddo loan, and, if so, how often you interact with that person; Kreditech looks at data from Facebook, eBay, and Amazon—and also considers such factors as whether you filled out the application with all caps or no caps (neither is a good thing); Kabbage also looks at your eBay and PayPal accounts, and offers approved borrowers the option of linking Facebook or Twitter accounts to their Kabbage accounts to up their "Kabbage scores."
"It turns out humans are really good at knowing who is trustworthy and reliable in their community," Lenddo's co-founder and CEO tells CNNMoney. "What's new is that we're now able to measure [this] through massive computing power." For now, however, only "a niche group of borrowers" is affected by this type of social data gathering (read: likely not you). Kabbage markets itself to small online business owners; Lenddo and Kreditech focus on emerging markets where credit is hard to come by. But Kreditech has started selling its technology to bigger lenders in some countries, and the practice could go mainstream.