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Social media credit score coming to a lender near you?

Are lenders reading your Facebook updates or looking at your Twitter connections to determine a social media credit score that indicates your ability to repay a loan?

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Lenders making their own social media credit score system?

CoreLogic and FICO partnered last year to offer lenders an alternative credit score for more predictive scoring, which includes data previously not used in credit scoring, from a borrowers cell phone bill, utilities, payday loan activity, to child support judgments, evictions, property tax liens, the status of homeowner’s association dues, whether or not a borrower is underwater on their current home, or whether a borrower owns other properties that credit agencies typically miss.

According to The Economist, lenders are flirting with the idea of using social media to determine a borrower’s creditworthiness, with startups actually launching the option today, and while big banks are steering clear, small banks and lenders are experimenting.

Analyzing social networks for creditworthiness

Neo is a startup founded by Navin Bathija to determine a borrower’s ability to repay a car loan based on their social networks, particularly LinkedIn which they use to determine whether job information provided on an application matches and is legitimate (found by analyzing the nature of LinkedIn connections to coworkers).

Bathija tells The Economist that he believes that within the year, there will be enough evidence to determine that making racist comments on Facebook indicates a lower ability to repay a loan. ZestFinance founder, Douglas Merrill says applicants who type in only lower case or only upper case letters are less likely to repay loans (other factors being equal), and the company’s default rate is roughly 40 percent lower than the typical payday lender.

It’s not just social networking behavior that alternative lenders are experimenting with, but also who users are connected to. European lender Kreditech asks applicants for access for a limited time to their social networks to analyze who they are connected to. Kreditech opines that if an applicant is more likely to get a loan if they have friends who live in nice neighborhoods and have good jobs. Alternatively, if they have friends who have defaulted on a Kreditech loan, they are less likely to get approved.

Movenbank is a web-only bank launching in the U.S. soon, which cuts users’ credit card interest rates when they talk up the bank to friends, or when friends join. The company drops rates and fees if spending is prudent, and in the future may raise rates for heavy gamblers. Taking it a step further, Lenddo in Hong Kong asks applicants’ friends to vouch for them, then analyze if those friends are real through their software which analyzes messages for shared slang or wording that “suggests affinity.” If the borrower defaults, the credit scores of those who vouched for them are damaged, in an effort to add a “social-enforcement mechanism.”

Social media credit score in the real world

Many of the aforementioned startups are niche lenders, either auto-only, payday lenders, or online banks, but do bigger lenders use social media to determine a borrower’s ability to repay a loan? While big banks are publicly steering clear of using any social networks for research, we’ve heard of smaller lenders and credit unions checking up on applicants online, not as a policy, but as due diligence. In some cases, applicants did not disclose they were getting divorced or had children, but a quick search online shows otherwise, disqualifying them.

If these kind of searches, or any of the methods used by the startups mentioned above, were to become policy at major lenders, there would most certainly be uproar not only because of privacy issues, but because social networks are not guaranteed accurate – anyone can say they’re married, they worked at IBM, or were a Co-Founder at Facebook, but it doesn’t make it true.

Additionally, examining connections is a poor method for determining anything about an individual, because the assumption of those lenders is that social media is used strictly for personal use, whereas many adults use social networks for professional use, connecting with people they never would in their personal life.

We don’t suspect this will be adding a social media credit score will be mainstream anytime soon, if ever, but alternative lenders are certainly figuring out how to use all of the available data to determine creditworthiness, privacy be damned.

Marti Trewe reports on business and technology news, chasing his passion for helping entrepreneurs and small businesses to stay well informed in the fast paced 140-character world. Marti rarely sleeps and thrives on reader news tips, especially about startups and big moves in leadership.

Social Media

Red flags to help you spot a bad social media professional

(SOCIAL MEDIA) Social Media is a growing field with everyone and their moms trying to become social media managers. Here are a few experts’ tips on seeing and avoiding the red flags of social media professionals.

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Social media professionals, listen up

If you’re thinking about hiring a social media professional – or are one yourself – take some tips from the experts.

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We asked a number of entrepreneurs specializing in marketing and social media how they separate the wheat from the chaff when it comes to social media managers, and they gave us some hints about how to spot whose social media game is all bark and no bite.

You can tell a lot from their socials

According to our experts, the first thing you should do if you’re hiring a social media professional is to check out their personal and/or professional social media pages.

Candidates with underwhelming, non-existent, out-of-date, or just plain bad social media pages should obviously get the chop.

“If they have no professional social presence themselves, that’s a big red flag,” says Chelle Honiker, executive director at the Texas Freelance Association. Another entrepreneur, Paul O’Brien of Media Tech Ventures, explains that “the only way to excel is to practice…. If you excel, why would you not be doing so on behalf of your personal brand?”

In other words, if someone can’t make their own social media appealing, how can they be expected to do so for a client?

Other taboos

These pros especially hated seeing outdated icons, infrequent posts, and automatic posts. Worse than outdated social media pages were bad social media pages. Marc Nathan of Miller Egan Molter & Nelson provided a laundry list of negative characteristics that he uses to rule out candidates, including “snarky,” “complaining, unprofessional” “too personal” “inauthentic,” and “argumentative.”

Besides eliminating candidates with poor social media presence, several of these pros also really hated gimmicky job titles such as “guru,” “whiz,” “ninja,” “superhero,” or “magician.”

They were especially turned off by candidates who called themselves “experts” without any proof of their success.

Jeff Fryer of ARM dislikes pros who call themselves experts because, he says “The top leaders in this field will be the first to tell you that they’re always learning– I know I am!” Steer clear of candidates who talk themselves up with ridiculous titles and who can’t provide solid evidence of their expertise.

How do you prove it?

According to our experts, some of them don’t even try. To candidates who say “’Social media can’t be measured,’” Fryer answer “yes it can[. L]earn how to be a marketer.” Beth Carpenter, CEO of Violet Hour Social Marketing, complains that many candidates “Can’t talk about ROI (return on investment),” arguing that a good social media pro should be able to show “how social contributes to overall business success.” Good social media pros should show their value in both quantitative and qualitative terms.

While our experts wanted to see numerical evidence of social media success, they were also unimpressed with “vanity metrics” such as numbers of followers.

Many poo-pooed the use of followers alone as an indicator of success, with Tinu Abayomi-Paul of Leveraged Promotion joking that “a trained monkey or spambot” can gather 1,000 followers.

Claims of expertise or success should also be backed up by references and experience in relevant fields.

Several entrepreneurs said that they had come across social media managers without “any experience in critical fields: marketing, advertising, strategic planning and/or writing,” to quote Nancy Schirm of Austin Visuals. She explains that it’s not enough to know how to “handle the technology.” Real social media experts must cultivate “instinct borne from actual experience in persuasive communication.”

Freshen up

So, if you’re an aspiring social media manager, go clean up those pages, get some references, and figure out solid metrics for demonstrating your success.

And if you’re hiring a social media manager, watch out for these red flags to cull your candidate pool.

#RedFlag

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Instagram re-posting can get your company into deep trouble

(SOCIAL MEDIA) This blowup over a shared Instagram pic is why many companies are doing their due diligence to not land in hot water.

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Can’t ignore it

The perfect Instagram shot is social media gold.

For a business, this is especially true if that shot demonstrates a product or service of theirs. Many of us walk around with the attitude of “Eh, it’s out there” and don’t give serious consideration to the sharing or tagging of our pictures by celebrities or businesses (heck, I think it’s rather flattering).

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Sharing is caring?

Entrepreneurs and small business owners should embrace that the best advertising is free: real people sharing real successes that cost no money to produce. I certainly understand and support any business who wants to use smart social media skills to make money and expand the customer base.

That being said, there are some times you need to really consider the use of your photos, and certainly a lot of businesses are giving thought to asking users about them.

This post captures a bad experience with a company who shared a photographer’s image and didn’t particularly care for that photographer’s response.

tl;dr: Max makes a most excellent case (Instagram’s terms of service would demand that you are responsible for paying the royalties of any image you post, after all).

Take action

A majority of companies are asking before using media for a few reasons because it’s not just the polite thing to do, it’s the legal thing to do. Whether or not you’re a professional photographer or a creative professional, you own the content of that post to Instagram, with some small concessions to Instagram itself.

Now, you need to exercise that right, but copyright privileges are not an exclusive power of the MPAA or any major media company.

You have some leniency as well. You may choose to let one company use your media and charge another; it’s within your rights to decide how you want that media to be shared. If someone is using content on Instagram and not crediting you, or using an image without your permission,report it.

This is another consideration if the production of photos or videos is part of your job. Making money off of content that you don’t own without permission is illegal, and small time photographers or image creators should be vigilant about ensuring their content is providing for them, not just someone else. The law is on your side, and for some additional information about registering your copyright for artists, here you go.

A lot of businesses are doing a great job using social media posts from customers, and that’s a trend that no matter how big or small, the businesses will and should continue.

Don’t be lame

Key rules here: respect and follow the wishes of the person who created that media. Whether it’s about money, or even something more intangible, businesses should respect social media convention and talk to their customers about how they want to use their media, how that person feels about that media being used, and of course, always crediting the original creator (unless you sell them the image in a contract).

Following the law, social media terms of service, and online decency is a trend everyone should be on.

#sharesmart

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Don’t let your Instagram vanish without a trace – have a backup plan

(SOCIAL MEDIA) In a weird glitch, multiple Instagram accounts vanished out of thin air. Don’t be stuck up the InstaVanish creek without a paddle… or at least a backup in place.

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Poof, gone

Can you imagine being locked out of your own Instagram account for no rhyme or reason? Well, dozens of people just found out, and they are PISSED.

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Thankfully, we’ve got a solution to make sure you don’t lose out if it happens to you.

First, some context

According to coverage from Consumerist, “Several Instagram users began complaining about the disabled or deleted accounts on Twitter today [July 6], noting that they received no warning or explanation for why their accounts were no longer active. The affected accounts appear to cover a wide range of users, from business owners, to fan and personal accounts.”

Via Twitter, Instagram did acknowledge a known bug causing the issue and said, “we’re working to resolve this as quickly as possible.”

However, the response came hours after complaints began, possibly because the issue allegedly affected a very small number of user accounts.

Furthermore, while Instagram gave instructions to users on how to reconfirm their identities and recover their account, they aren’t guaranteed to work.

So, bearing all that in mind, we here at American Genius recommend backing up your entire account in order to preserve your content.

Use what they give you

If you still have access to your account, you can utilize Instagram’s recently-launched Archive function. This lets you take photos off public view without removing them from your account; only you will be able to see them.

However, this does you no good if you’re already locked out, nor does it save posts that are publically available.

For that reason, we recommend a third-party backup option for your profile content.

A’int no party like a third party

You have a few different options. Our favorite one utilizes IFTT (If This, Then That). Using this automation tool, you can write a conditional function that says if you post a new photo to Instagram, it will automatically be sent to a cloud drive, such as Google Drive, OneDrive or Dropbox.

Along with the benefit of multiple storage options, we love this solution because you can set it and forget it.

That being said, it is not a complete solution; IFTT will ONLY backup up new photos, instead of old ones. To backup your entire collection of old memories, Instaport seems to be a crowd favorite.

Instaport is a free service that lets you download a backup of your entire account.

Once you download this backup, you could upload it to your preferred cloud storage provider, then set IFTTT to send future backups into that same folder.

Better safe than sorry

Using these tips, you can avoid being a total victim of an Instagram screw-up. Hopefully, this recent one will resolve shortly.

#InstaVanish

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