by John Aravosis

Please write financially secure comments to this post:

"Your social networking chit-chat could have an impact on your credit - specifically on whether banks think you are worthy of a loan.

Creditors are checking out what you post to your Facebook and Twitter accounts. They're checking out who your friends are and who the people are in your networks.

The presumption is that if your friends are responsible credit cardholders and pay their bills on time, you could be a good credit customer..."

How long until health insurance companies do the same?

The banks claim they're just checking you out for "marketing" purposes, then they admit it's actually about whether to give you loans or credit:

"Pretty much everything you and your network reveal may be compiled, including status updates, "tweets," joining online clubs, linking a Web site or posting a comment on a blog or news Web site....

Another reason credit issuers are looking to this data is to reduce lending risk. Social graphs allow credit issuers to know if you're connected to a community of great credit customers. Creditors can see if people in your network have accounts with them, and are free to look at how they are handling those accounts.

The presumption is that if those in your network are responsible cardholders, there is a better chance you will be, too. So, if a bank is on the fence about whether to extend you credit, you may become eligible if those in your network are good credit customers.

"Credit card companies have been stung very hard during this downturn, and they're going to work that much harder to avoid extending credit to people with a high level of predictable losses," says Ken Clark, author of "The Complete Idiot's Guide to Boosting Your Financial IQ." "Social graphs can preemptively cut the amount of charge-offs by not giving high-risk people a card. It may translate into hundreds of millions of dollars industry wide."

http://www.americablog.com/2010/01/banks-now-checking-your-twitter-...