BROWNWOOD, Texas - Sutton Financial Group CEO and financial advisor, Troy Sutton, said there is an evolving theory that start-up lending companies will be looking at people's Facebook profiles and friends to determine whether or not they are qualified for loans.
"If you have a lot of friends on Facebook that have bad credit or a lot of missed or late payments, these start-up companies' thesis is that by association, you're probably going to be spending money the same way that your friends are," Sutton said. Such companies would need permission to access social data.
Although the theory is not supported by any data, Sutton said raising awareness is good so that people know the opportunity exists should they take a non-traditional route. This theory would mostly apply to those without credit scores. They would have to give permission and access before alternative lenders can dig up information. "They're going to look at your Amazon, Paypal and eBay histories and make sure they look good."
These loans could be for purchasing homes, cars and even to start small businesses, which many people in Brownwood hope to do.
However, Sutton said there is no need to worry because rather than looking into social data, most reputable banks will still do a fair investigation of your credit worthiness before approving your loan.
Focusing on the present, Sutton said the first step to getting a loan is to talk to a bank or credit union and go over credit reports. Dispute any errors you may find. Increase your credit score.
"Most importantly, look at credit available compared to credit used. You don't want to use more than 30 percent of credit available, and of course as long as you pay when it's due, you're good," Sutton said.
You can find more information at www.suttonfinancialgroup.com.
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