How Facebook and Twitter Can Ruin Your Credit Rating, Job Prospects and More

Do you ever get spooked by the ads on Facebook that are specifically targeted at you, or the odd friend suggestion made about that random person you met 10 years ago? Well, things in the social media sphere are set to get a whole lot spookier and this time it could affect your finances.

Prospective employers, landlords and even financial institutions and insurers are using information posted on public social media sites such as Facebook, Twitter, MySpace and Flickr to find out information about clients. It's something called 'data mining', and it's becoming increasingly tapped by businesses. They are not breaking any rules - after all, the information is public.

So how do they do it?
Think of it this way. Have you ever googled someone? Chances are you have. Data mining works in a similar way, but the software and tools available for companies to dig up information on clients is much more sophisticated. It means that the lender you sent in that credit card application to could end up seeing that drunken photo of you on Facebook and decide to reject your application.

Now, it is important to state that this is not something that is happening en masse, yet. But news articles and blogs aver that businesses, including lenders and insurers, are increasingly using data mining to gather information and it is only a matter of time before it becomes a mainstream practice. It's something they say will become particularly hazardous for youths as they try to establish a credit rating because they are the most vigorous users of social media sites.

Social media providers have come under increasing pressure in recent years to provide companies and marketers with information about their users and there is a lot of money on the table for those social sites that play ball. Facebook is the classic example. The site's privacy options, which in its early incarnation were rather easy and straight forward to use, have changed drastically over the years to make information on the site more public. This is not a direction being driven by the site's users. Each time a change is made, those that do not go in to update their privacy settings often find themselves exposed on the world wide web. Many users are not even aware this has happened.

The extent of the information companies have access to through data mining is worth its weight in gold and therefore it is not something that will just disappear. Social media users therefore must be alert to what sort of information about them appears on the Internet to avoid potential problems in the future.