Facebook patented Tuesday technology that could be used for a number of things. This could help filter out spam and offensive content. Or it might improve searches.
It could also allow lenders to use a borrower’s social network to determine if they represent a good credit risk.
Here’s how it would work: You apply for a loan, and your potential lender somehow reviews your Facebook friends’ credit ratings.
“If the average credit score of these members is at least a minimum credit score, the lender continues to process the loan application. Otherwise, the loan application is rejected,” the patent states.
Facebook ( declined to comment. )
The company applied for the patent in 2012, after buying it into a patent package from Friend for $40 million five years ago.
It’s unclear if Facebook would ever try to use the patent for the loan, or how exactly that would work. How practical is it for a lender to try to access all the necessary information they need from your Facebook friends?
There is also a federal law, the Equal Credit Opportunity Act, which strictly regulates the criteria that creditors can use to decide on a loan – things like income, expenses, debts and credit history determines creditworthiness.
“It’s no reason to lose sleep for people with decent credit histories, but it could potentially affect those who are borderline to begin with,” said Greg McBride, chief financial analyst for Bankrate.com. .
The patent was discovered by Mikhail Avady, founder of SmartUp, a legal technology company in Atlanta.
CNN Money (New York) First published August 4, 2015: 5:30 p.m. ET