Cashing In On Social Capital

The Economist recently reported on social networking data getting factored into credit scores:

Applicants who type only in lower-case letters, or entirely in upper case, are less likely to repay loans, other factors being equal, says Douglas Merrill, founder of ZestFinance, an American online lender whose default rate is roughly 40% lower than that of a typical payday lender. [The efforts of Neo, a start-up that assesses the creditworthiness of car-loan applicants] to improve accuracy include recording borrowers’ Facebook data: Mr Bathija reckons that within a year there will be enough evidence to determine if making racist comments on Facebook is correlated with a lack of creditworthiness.

Tongue in cheek, Nicholas Carr imagines “a new revenue stream for Facebook here — some kind of automated friend-portfolio management app that optimizes your mix of friends”:

Maybe Facebook could even set up an exchange for trading friend-portfolio derivatives. You could have everything from Aaa-rated friend portfolios (stable marriages, high-net-worth zip codes, regular statin intake) to speculative junk-rated friend portfolios (druggies, socialists, poets).