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Posted: 6:00 a.m. Thursday, Oct. 31, 2013

Facebook friends could hurt your credit

By Clark Howard

The company you keep on social media could determine if some lenders deem you creditworthy or not.

Alternative online lenders like who work with online businesses are paying close attention to your friends and associates on social media. In fact, your profile on social media factors into Kabbage's proprietary scored assessment of you. And surprisingly, they report that online businesses with a good social media score are 20% less likely to default on loans!

Other lenders also looking at your social media friends to make a decision on your lending application include foreign sites like

This whole idea goes back to a key rule of relationship banking: Know thy customer. Banking used to be a local activity where judgments were made not always based on assets, but on your character. The fact that Kabbage is now using social media to determine what kind of person you are gets back to that.

So be sure the people you friend are real friends, not frenemies.

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