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Credit Bureaus and Facebook

W Lexington Law. CREDIT BUREAUS AND FACEBOOK A HISTORICAL LOOK AT THE TWO MOST POWERFUL SOURCES OF PERSONAL PROFILES Credit reports constituted people's most comprehensive profiles before Facebook's rise to prominence. Today, Facebook commands a treasure trove of personal information about its approximately 1 billion users, but the impact of credit reports hasn't waned; in fact, it continues to grow as technology makes the reports ever-more accessible to consumers, lenders, and employers. The impact and significance of credit reports can be difficult to grasp. The following compares the history and impact of the generators of your financial and social profiles, the three big credit bureaus -- Equifax, Experian, and TransUnion -- and Facebook. HUMBLE ORIGINS Credit Bureaus I 1874 1830 I A new type of business -- a credit reporting agency that compiles credit reports -- is invented by a group of concerned wholesalers in New York City. Menlo Park, the future home of Facebook's much- admired headquarters, incorporates in California. I 1944 1841 1. Two Atlanta brothers make a list of well-paying grocery store shoppers; they sell the list to businesses and found the Retail Credit Company, to become known as Equifax during the second half of the next century. Frederick Terman, a figure instrumental in the development of the Silicon Valley's community of "technical scholars," is appointed dean of Stanford's School of Engineering I 1984 1899 I Mark Zuckerberg, future Facebook co-founder, chairman, and CEO is born in White Plains, NY. The Mercantile Agency, a credit bureau for businesses known today as Dun & Bradstreet, is formed in London. I 1985 1950 1-- National Science Foundation begins building NSFnet -- an important precursor to the Internet. An engineer and a mathematician -- Bill Fair and Earl Isaac -- devise a mathematical model to predict the likelihood that someone would fail to repay borrowed money. Eventually they call the process "credit scoring" and create the now-famous FICO Score. I 2003 Before deciding to leave Harvard to heed the siren call of the Silicon Valley, Mark Zuckerberg creates Facemash, and generates interest to the tune of 22,000 photos views in its first 4 hours of existence. 1960 I 98% of Equifax's data is compiled by in-house investiga- tors capable of churning out 1 credit report every 4o minutes, usually with many errors. 1968 1… TransUnion founded when investors buy a local Chicago credit bureau and proceed to merge it with other local credit bureaus across the United States. 1980 I Experian founded when a company previously best known for running department stores in Great Britain, GUS PLC, buys a regional American credit bureau from TRW Corporation. INDUSTRY EXPANSION Credit Bureaus I 2004 Mark Zuckerberg founds Facebook, initially open to college students only, and moves its headquarters to the Silicon Valley, the Mecca for tech startups. 1990 Equifax, Experian, and TransUnion all sell FICO scores to businesses. 2003 1 57-4 million credit reports are released to consumers. I 2006 Facebook opens to 100% of the public. 2004 I I 2011 David Fincher's The Social Network wins 3 Oscars. Each of the three big bureaus is estimated to have 200 million credit files. I 2012 4 billion items enter these files monthly. 901 million people use Facebook each month. 2010 I 63% of employers review employees' and prospective employees' social media output. 60% of employers check the credit history of at least some job applicants. 13% of employers check the credit histories of all job applicants. GOVERNMENT REGULATION Credit Bureaus I 2011 1971 U.S. Congress passes Fair Credit Reporting Act and begins regulating the credit reporting industry. Consumers are given fairer access to their credit reports for a fee. Facebook enters into an agreement with the Federal Trade Commission: for the next 20 years, Facebook will undergo an audit of its privacy practices every two years. I 2012 1996 I FCRA is amended to give consumers better access to their credit files. Legislation is being drafted to prevent employers from demanding social media user names and passwords from potential hires. 2003 1-. Fair and Accurate Credit Transactions Act entitles consumers, annually, to one free credit report from each of the three bureaus. MASSIVE IMPACT Credit Bureaus 1960 I I 2008 Credit history factored in employment decisions. More employers run credit checks on job applicants in order to assess the risk of offering them a job. A New England Patriots cheerleader is booted from the squad after posting controversial photos on Facebook. I 2009 2002 1...... 78% of credit files found to be missing a revolving account in good standing. 17% of companies with 1,000+ employees experience "issues" with their employees' social media use. I 2010 2004 I- 25% of credit reports found to contain errors that can cause a credit request to be denied. A Massachusetts high school teacher loses her job after complaining about students on Facebook. I 2012 2005 1.... The U.S. Government Office of Accountability publishes results from a survey of Americans' credit : literacy. Out of 1,578 polled individuals: Facebook IPO is filed and the company is valued at approximately $100 billion; its record-breaking valuation is due to the incredible amounts of data it has on its 901 million users, all which is dearly coveted by businesses and marketers. orting 18% of respondents have disputed a credit report inaccuracy. Facebook addresses publicly the issue of employers requesting access to job applicants' Facebook profiles. 7% of respondents know that the credit reporting system is voluntary. Only 36% of respondents know that credit history impacts their insurance coverage fees. Only 33% of respondents know that credit history impacts their employment prospects. 59% of respondents are unaware that they can add a personal statement to their credit reports when a disputed item remains unresolved.

Credit Bureaus and Facebook

shared by sagum on Jun 26
A historical look at the two most powerful sources of personal profiles.


Lexington Law


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