Can Your Online Life Impact Your Personal Finance Opportunities?

Thursday, June 27, 2019, 6:00 AM | Leave Comment

Understanding and maximizing your personal finance opportunities can be an ongoing challenge.

Not only do you need to maintain a good credit score, but if you plan on applying for loans or a mortgage, then establishing a long-term employment history is also important.

You may use any number of strategies to demonstrate that you’re financially responsible and a great candidate for a loan or a new credit card, but your online activity could undermine your efforts.

More businesses now understand the value of data, and employers, universities, and even financial businesses are turning to online data for additional insight into their clients.

Social media accounts offer these companies a wealth of information, but even if you’re not active on social media, companies can still glean details about your life from other online sources.

Everything from your email address to the time of day that you contact a company communicates information about the potential risk the company would carry in providing you with financial services.

There is a wealth of other methods to gather information about consumers. If you want to know all about how you can be snooped on, look no further than the tactics used by the NSA.

They’ve been known to use the following:

  • Phone records

  • GPS data

  • Computer equipment

  • Social media accounts

Can Your Online Life Impact Your Personal Finance Opportunities
Image Source: Pixabay

Your online life can provide even more detailed information about your behavior, current employment, spending habits, and more. Posting on social media or maintaining a personal blog might seem like harmless activities, but financial companies are now actively using online data to assess risk factors and determine loan approvals and interest rates.

The information you willingly post could be affecting your chances of getting a loan, mortgage, or new credit card without you even being aware of it.

  • Why Your Online Life Matters

    If you apply for a loan, the loan company needs to determine how much risk they will take on if they approve the loan. Thanks to social media, all of the information these companies are looking for is accessible online. Photos of you making a big-ticket purchase, like buying a new car or going on an extravagant vacation, can shape the loan company’s assessment of your risk, affecting whether you are approved for the loan.

    But these companies aren’t just looking for photos of extravagance. They may research what you’re saying about your employer and how long you’ve been steadily employed. Companies can even analyze the device you used to apply for the loan, and if you applied late at night or early in the morning, they may interpret this data to imply that you’re in a tight spot financially.

    Your online life could also affect your insurance premiums. There are various risk factors, such as the time of day, type of phone, and characteristics of the email address you use to research car insurance. Each of these factors could result in insurance premium hikes or savings, should insurance companies decide to use that data now or in the future.

  • Mistakes That Can Affect Your Personal Finance

    Some common mistakes can quickly damage your online branding. Leaving your social media profiles set to public makes it easier for companies to research your habits and means that anything you post is viewable to loan companies and more. Even if you set all of your social media profiles to private, it’s still important to avoid posting material that could cause a company to doubt your trustworthiness, such as negative comments about your job.

    It’s particularly important for younger generations, who spend much more time on social media platforms, to understand the effect that your online life can have on your personal finance opportunities. Activities that might appear normal to younger generations, like posting photos of time spent at bars or checking in at casinos, can make lenders consider applicants to be higher risk. Identifying frequent moves or relocations can also indicate instability and financial risk for a lender.

    If you use LinkedIn, then keeping your profile updated can potentially improve your risk assessment in a lender’s eyes. Update your profile with current information on your employer, your career, and your career achievements, like promotions. Take steps to keep all of your social media and online accounts safe from hacking by maximizing your cybersecurity and using different passwords on different sites.

  • How Online Reputation Management Helps

    If there’s information on the internet that you fear will negatively impact your personal finance opportunities, it’s not too late to change it. Reputation management can allow you to curate what information people see about you. Your online identity is a key part of your overall identity, and hiring a reputation management professional can help you to protect and better control it.

    A professional reputation manager offers a sort of “online makeover” by scrubbing or burying negative content that you don’t want companies to see and replacing it with positive content. A reputation manager will help you to identify online information that could damage your reputation. They can help you to create appropriate positive content and will often provide you with strategies that you can implement yourself in addition to their behind-the-scenes work.

While you shouldn’t be overly paranoid, you should use common sense and consider how a potential employer, a lender, or an insurance company would view the content you post. By using reputation management, caution with social media, and platforms like LinkedIn to strategically position yourself, you can demonstrate your financial security and maximize your personal finance opportunities.

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