Do you reveal a little too much on social media?

As it turns out, what you say online could actually make a negative impact on your credit score.

Think about it from the perspective of lending companies. It’s not actually their job to lend money — their job is to recoup their losses, plus interest. If you were the one whose job depended on this, you might also consider all the facts available to you, especially if some of them readily available through a quick Google search.

If a lender looks you up and sees that you’ve just made a big purchase or quit your job, that could actually factor into their decision of whether or not to lend you money, or at what interest rate.

Traditionally, credit scores are calculated on factors such as how you pay your bills, the amount you owe, and how long your credit history is. However, this information doesn’t always present a fully accurate view of the person inquiring about a loan. People lie on their loan applications, and can otherwise deceive creditors into entering loan agreements that are unfavorable to them.

It’s no wonder then that more and more lenders are interested in doing their due diligence on social media before approving loans.

But don’t get too worried yet. Though there is a lot of talk about social media and credit scores, it’s a complicated subject with no firm answers as of now. As the Wharton school says in an article on the subject,

Financial data, or anything that may relate to financial data, are heavily protected in the United States. And we have rules about discrimination. The reason why … a company that is smart and operating in this business may prefer not to be in the United States is because, if I’m looking at your social network and if I’m denying you for a loan based on your social network, that may end up as a discrimination lawsuit.

So what’s a person concerned about his creditworthiness to do?

Use good common sense.

Social media is becoming more and more powerful as time goes on, and it’s not just creditors who may take your online presence into account when doing business with you. Before you post personal information, consider for a moment how what you’re saying will look to others.

If you use common sense, you’ll be on the right track, no matter how social media begins to affect your credit score.