A firm that checks your credit AND Facebook

DO YOU have only a few friends on Facebook? That could affect your chances of becoming a customer with one of the UK’s latest loans firm.

118118 Money, a spin-off from the directory i nquiries service, is asking borrowers to confirm how many Facebook friends they have when applying for a personal loan.

The firm says it is only asking for the information, and other details such as your car number plate, to find out more about its customers.

But industry experts say it could be used to figure out how much interest to charge, and whether to award a loan to certain types of people. For example, if they find people with zero to ten friends typically fail to repay, it could be held against borrowers who fall in to this category.

Some lenders now comb Facebook to see your online community and if your friends pay off their debts.

Last week, 118118Money launched offering loans from £1,000 to £5,000 to borrowers who can’t get money from the big banks. It charges an annual percentage rate of 35.9 pc.

You pay fixed monthly amounts over 12 to 24 months, starting from £57. Its application form at first seems relatively straightforward — asking standard questions about personal details.

But the second page asks for your car registration and how many friends you have on Facebook.

Paul Noble, chief operations officer of 118118Money says: ‘We’re looking to make it more human and we can learn more about our customers and how to interact. At the moment, we’re collecting data to learn about our customers.’

Typically, when you apply for a loan, banks run checks on your identity, and whether you have been a reliable payer of bills in the past. They do this by looking at your credit file.

But in a desperate attempt to get more data, some lenders now scour Facebook to get a better picture of whether you’re likely to repay a debt, while getting your car registration number allows firms to see what type of vehicle you drive.

If you drive a Skoda, for example, you might be viewed as more sensible and trustworthy — and so better to lend money to.