

Facebook to examine your social network on behalf of lenders - buren
http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=9100400.PN.&OS=PN/9100400&RS=PN/9100400

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buren
"In a fourth embodiment of the invention, the service provider is a lender.
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. "

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jeffmould
While IANAL, I am fairly familiar with the Fair Credit Reporting Act (FCRA).
This would seem to be completely illegal under FCRA as only those with a
"valid need" are allowed access to your file. Depending on how this is done it
could also be significantly damaging to an individual's social network if the
inquiries made are "hard inquiries" as those directly affect an individuals
score for a period of two years. (source:
[https://www.consumer.ftc.gov/articles/pdf-0096-fair-
credit-r...](https://www.consumer.ftc.gov/articles/pdf-0096-fair-credit-
reporting-act.pdf))

Additionally, I know of two people directly in my circle of friends who have
had their identities stolen in the last couple years. As part of that I know
from talking to them their credit took a significant hit and they have been
working to clean it up. While this patent claims to take the average, that
average can be directly impacted by something like identity theft if the
sample is small.

I believe a better credit scoring method would be to utilize bills and banking
that are paid more often, yet not reported to agencies. For example, I pay my
rent, cable, cell phone bill monthly. I also keep a balance in my bank account
for rainy days. On the other hand, I only have one credit card and only use it
in extreme emergency and rarely have a balance on it. My credit score is good,
but could be better because of this. I would rather be judged on the bills I
pay monthly rather than the bills I pay rarely. The irony of things like rent,
cable, cell phone, etc... is that they don't report unless it goes to
collections. There should be an "all or nothing" law. If you don't report
timely payments you can't report untimely ones. That to me would be a better
use of the credit reporting system.

