Is Google the New Credit Bureau on the Block?

Google is now determining my credit score.

But unlike lenders, credit bureaus, and FICO, the internet behemoth isn’t basing my score on my payment history or level of debt. It’s basing in on the websites I visit and the terms I search for.

By tracking my internet behavior, Google says it can clump me into the Super Prime (720 and above), Prime (600 to 719), or Sub-Prime (below 600) credit score group.

And the survey says…

Google, the largest search engine and ad-space broker on the internet, has partnered up with Compete, an analytics company. Together, they’ve studied the web behavior of two million people who have volunteered their credit scores. (Why you would ever volunteer your credit score information in the name of market research is beyond me.) In any case, Google claims it can use this behavioral research to identify web users with good, mediocre, and poor credit.

In fact, Google’s senior industry marketing manager Masha Korsunsky asserts that Google can now target 70% of credit card applicants who have a high FICO credit score, 87% of those applying for mortgages who have a high FICO, and 90% of small business site visitors who have a high FICO.

Based on the new research, Google now claims with a scary degree of certainty that over 50% of people who shop for credit cards online have a FICO┬áscore of at least 720. This Super Prime segment of the population apparently takes its time shopping for credit, often performing more than five searches with terms like “best credit cards,” “low rates,” and “travel rewards.” Those with FICO┬áscores below 600, on the other hand, are hastier in their credit card searches (presumably because they are more credit-hungry).

Does internet behavior really signify a credit score?

Personally, I don’t buy it. Google may have done a ton of research tracking two million people, but it scares me to think they are estimating my credit score–and communicating it to marketers–based on my internet behavior alone. I just don’t think that’s a fair or accurate measure.

This practice seems to me no better than a carnival trick in which a “psychic” says she can guess your age. Sure, my physical appearance offers plenty of clues, but what proof does she have? Absolutely none. Even if my shirt says “It took me 60 years to look this good,” the guesser hasn’t seen my birth certificate. Nor does she know if I’m exactly 60, or perhaps a more seasoned 65. And if she does guess my exact age, I’d chalk it up to luck.

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And the guess Google has to make is even easier. There are only three credit score buckets in which to dump us: Below 600, between 600 and 719, or above 720.

Google might guess right, and our internet behavior might even provide clues, but that doesn’t mean there is a direct link between our internet behavior and our credit scores. Google shouldn’t be assuming our credit scores based on internet behavior. A search engine simply has no business being in the credit scoring business. Just because it has commissioned a huge amount of behavioral research doesn’t mean it is now the fourth credit bureau on the block. (Now, if it was to partner with an existing credit bureau, then we’d all be in trouble. But thankfully that hasn’t happened…yet.)

How will marketers use this information?

It’s not clear exactly how Google is going to capitalize on this new credit score research. It will most likely overlay these credit score assumptions about us into its ad network, selling advertisers on the idea that they can now reach consumers within certain credit score ranges.

But before marketers get too eager about being able to target a demographic based on credit score, they should remember that plenty of wealthy people out there have horrible credit history, and plenty of poor people have 700+ scores.

Nevertheless, if Google deems you to be in the Super Prime crowd, don’t be surprised if you start seeing more text and display ads for luxury products and platinum credit cards. And if you’re in the Sub-Prime category? Well, you should probably beware of an increased number of get-rich-quick schemes, high-interest credit cards, and other sketchy opportunities. Many companies out there are incredibly eager to advertise to those in financially desperate situations. And Google has just provided one more way for them to do that.

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