Do Borrowers of a Feather Flock Together?

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Facebook believes that you might be the company you keep, at least according to a patent it has.

“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,” reads an explanation of the technology. “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.”

Diagram below:

This is one of those concepts that if ever used, is likely to end up prohibited under an amendment to the Equal Credit Opportunity Act or similar.

What are your thoughts on this?

And also, you might want to check out similar patents that Kabbage has in its arsenal.

Last modified: August 6, 2015
Sean Murray

Category: Business Lending

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