Friends with Poor Credit Habits

The social network giant bought a patent enabling it to sell your list of Facebook friends to banks. What this means is that your friend’s poor credit history or unreliable repayment behaviour may have an impact on whether or not banks decide to grant you credit in the future.

Despite having an excellent credit record, if your Facebook friends have negative listings under their credit profiles, some banks may reject your credit application after finding out.

Mark Zuckerberg bought technology patents to the value of £26+ million recently, as well as the right to sell Facebook users’ friends lists’ to financial institutions.

Risk By Association

This gives lenders the opportunity to check up on your Facebook friends, to get an indication of the kind of individual you are, based on the social circles you associate yourself with.

As such, when credit providers are considering your credit application, they’ll also inspect your friends’ credit histories, to assess whether you are likely to be a high or low risk credit user.

On the other hand, experts have explained that, despite having bought the patent, Facebook may never use it.

The Patent States:

“When an individual applies for a loan, the lender examines the credit ratings of members of the individual’s social network who are connected to the individual through authorized nodes. If the average credit rating of these members is at least a minimum credit score, the lender continues to process the loan application. Otherwise, the loan application is rejected.”

How this will specifically affect one’s creditworthiness, employability and debt situation is not yet known.

Techspert, Adam Epstein says:

“Major tech companies…secure patents for weird ideas all the time — that doesn’t mean they’ll ever be implemented. Facebook could decide to use just part of the patent, while disregarding the lending portion. Or it could just be a superfluous part of the patent bundle…that was never intended to be used. Or…an asset to be sold on to someone else.”

After buying it from the gaming network Friendster in 2010, Facebook was officially granted the patent by the US Patent and Trade Office. But, I wouldn’t start unfriending the splashiest spenders in your friendship circle just yet. Rather, follow our blog page to see how the story develops!