Can Facebook Kill Your Credit Score?

You want to be my Facebook friend? Sure! What's your credit score?

We all know the benefits of a good business credit rating. Lowering the cost of doing business will put money back in your pocket or give you the extra funding for future expansion. Either way, it's a critical part of any small business, and it's something you should monitor carefully.

So when I read about the fact that financial institutions have been busy researching how to best data-mine your social network accounts, I got a bit nervous. If you're like me, you use Facebook, LinkedI,n and Twitter on a regular basis with little thought about how it might affect things like creditworthiness.

But now that banks are seeking to use data pulled from our social network lives as a risk metric for measuring credit scores, I started to wonder exactly who my "friends" are -- and whether they remembered to pay this month's electricity bill.

The move by lenders seems logical. Today we hear about businesses using information gathered from the Internet to make hiring decisions. I guess that banks should be able to use this same information to make lending decisions. But I find it hard to believe that an algorithm can be created that completely synchs up with all social network users.

After all, some of us have a very tight-knit group that we interact with online while others accept any and all friend requests. Also, many small business owners use social networking not only for personal use but also for marketing purposes. Surely that would throw a monkey wrench into the equation.

So if you want to play it safe, you may want to ask for a credit report from your friends, family, and neighbors before you begin socializing with them online. Or simply cut the social network cord now if you really want to be conservative.

Alternatively, we could look at this as a new and emerging market for entrepreneurs. Maybe in the future, those of us with high credit scores could rent our "friendships" to assist others in securing loans. You laugh, but it just might happen!