Your network is equal to your net worth: Soon, Facebook can approve loans based on your friends' credit scores
By Staff Writer
Facebook patented a social network system that could advance search results, identify spam messages and sort offensive topics. It could also distinguish if a potential borrower is capable of paying debts through the user's network connections.
According to the U.S. patent document filed by Christopher Lunt, the invention involves a technical process to authorize transmission of codes to users' network in order to filter unwanted programs. It will also authenticate service providers to access members' content and services.
The Facebook patent will prevent members to show up in the search results of other members with whom they are not directly connected. It will also prohibit receiving spam messages.
It will give an authority to service providers to track user's network connections. They could also check blacklisted individuals who have been found unreliable.
Some people abuse the Internet by sending unwanted and unsolicited emails to individuals. Content and service providers found a solution limiting the access to those who are legally permitted to grant their services, but the method appears to be so restrained. Reasonably, it is a burden to both users and providers.
If Facebook will use this patent in the future and a Facebook member will apply for a loan, the lender will be the service provider. The lender could scrutinize the user's Facebook friends' credit ratings.
"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," stated the patent application document.
At this point, banks use the advanced technology to assess clients. But a report from Market Watch states that 45 million Americans have no access to banking services like auto loans and credit cards. These are the low wage earners who rely on payday loans which has relatively high interest rates.
As of now, it is still unclear if and when Facebook will use it.