17
Sep

In the past several years, credit scores have come to the forefront for millions of Americans dealing with financial issues of all types, and the importance of these three-digit numbers is something many people keep in mind when making all kinds of decisions with their money.

However, while these ratings are used to determine loan eligibility, other factors often come into play, and more recently, that has come to include the kinds of people you're friends with on Facebook. The fact of the matter is that many lenders are granting all types of financial products to many consumers who apply for them, but are still very cautious about the kinds of people to whom they'll extend credit. Many took major financial hits during and following the recession as a result of rising rates of delinquency and default, and are consequently still somewhat wary of Americans' ability to pay back their debts.

That, in turn, has led them to consider new factors, including the kinds of people with whom applicants are friends on Facebook; one growing lender has the ability to look into those other people as well, to determine whether they are behind on any debt payments, according to a report from CNNMoney. Further, they will then determine whether this is a person whom the applicant interacts with frequently. If the former, and especially the latter, circumstance in the case, the lender might be more apt to approach with caution, meaning that they could increase rates and fees on a loan, or deny it altogether.

Moreover, other companies are also looking into other types of online behavior, such as eBay or online shopping accounts, the report said. Others may consider how a consumer fills out an application, or how long they take to do it, when determining their credit-worthiness. While these issues by themselves may not be enough to grant or deny anyone a loan or other line of credit, these on top of a troubled credit score might pose serious problems for would-be borrowers.

What can you do?
When it comes to the people you interact with online, it's obviously not always possible for you to know which of your friends might have fallen a month or two behind on their credit card bills, and some consumer advocates would likely argue that it's not necessarily fair for you to be judged on the basis of your friends' or even acquaintances' behaviors.

Nonetheless, it's an issue you may have to deal with when you apply for a loan, and something you'll therefore have to keep in mind in the run-up to doing so. However, it's not the most important issue. Again, these kinds of factors will likely only create an issue for you if your credit score is on the borderline of what's acceptable. But the more work you do to fix credit issues you've faced in the past, the less likely these social media and other online issues will be to affect you.

As a result, you should focus on improving the basics of your credit standing. That means making sure you've altogether cut out any late payments you might have been more accustomed to making in the past, as well as doing more to increase the value of those payments so that your debt will fall more quickly. Taking care of these two issues alone, which account for a combined 65 percent of your score, will certainly help to put you on the path to clean credit.

What to keep in mind
It's important to know during the credit repair process that this isn't easy and it usually takes some time. It's therefore important to not get frustrated by the financial difficulties you might face during this time, and keep in mind that they're largely for the greater good. Further, you should view these efforts as an investment in your own financial security in the future, as having a good score will not only entitle you to more access to credit in general, but better terms on that credit, meaning that you'll probably end up paying far less over the life of whatever loans or other lines of credit you take out while your score is as high as you can possibly get it.

However, it's also important to remember that there's more to maintaining good credit than just paying all your debts off and making sure to keep up with your payments. You should also make regularly ordering copies of your credit reports a part of your financial routine, as doing so will not only let you know where you stand, but also allow you to determine whether any unfair markings appear on these documents. If so, it might be wise to contact a credit repair company about the issues as a means of getting them remediated as quickly as possible.


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