Credit score companies turn to Facebook -

Credit score companies are starting to use data gathered from Facebook to determine how much cash finance companies should loan you.

According to CNN, a handful of tech startups are using social data to determine the risk of lending to people who have a difficult time accessing credit.

Normally companies ignore such types which might be a good credit risk because they don't have credit scores.

But apparently financial lending companies are becoming interested in how social connections can be a good indicator of a person's creditworthiness.

One outfit, Lenddo, looks to see if you're friends on Facebook with someone who was late paying back a loan. If so, then that harms your score.

If you only interact with the person a couple of times it probably will not matter so much, but if you talk to the person every day it could really do your finances some harm.

Jeff Stewart, a co-founder and CEO of Lenddo said that humans are really good at knowing who is trustworthy and reliable in their community and this can now be measured by computers.

A German company called Kreditech says that it uses up to 8,000 data points when assessing an application for a loan.

It uses data from Facebook, eBay or Amazon accounts and gathers information based on how customers fill out the online application.

If you read information about the loan on Kreditech's website you will increase your credit score, but if you fill out the application with caps lock on you lose points.

Creditworthiness is also based on where your computer is located and where you say you live or work.

What is a little alarming about all this is that it is based on assumptions on the interactions between humans, which are sometimes a little more complex.

For example, a person might come into contact with people who have poor credit scores for all sorts of reasons.

A person might have a thriving online business which is based from home and not need to use a work computer. These things do not mean that they are a credit risk.

What is more alarming is that this could alter people's behaviour, and those with poor credit scores could actually become lepers. After all if you talk to someone with poor credit it could stop you getting an agreement on that sofa you're after.