How Your Online Activities Can Ruin Your Credit

Perusing the internet and building online social networks used to be activities reserved for computer nerds and technologically savvy teens. Now, even Grandma has a Facebook profile. The entire population is online and everyone from marketing experts to creditors know it. What used to come way of billboards, TV commercials and magazine pages is now streamed through your inbox and splashed across your newsfeed, and your credit may be suffering.

One of the easiest ways to lower your credit score is by carrying a high level of debt. Subscribing to the e-mail lists and social media fan pages of your favorite establishments may help you stay on top of the latest trends and deals, but also encourages you to spend more than you probably should. Plus, it’s not just your friends viewing your profile and tracking your online activity. You may be surprised by the type of information you send out when you log in.

How You Get Hooked

With companies pouring billions of dollars into social media advertising aimed directly at you, this industry is no game. There are teams of marketers strategically sending out that e-mail, tweet or Facebook fan page update that you look forward to reading. Online marketers want to be sure they’re providing you with great, comprehensive online service because they know you expect it, need it and will flock to it.

You don’t stand a chance.

Newsletters: An Easy Way to Sell

From Nordstroms to TJ Maxx, Barneys to Target, Overstock to Amazon, all they need is your e-mail address to keep you coming back for more.

Signing up for their newsletter lets them know you’re interested in what they have to offer, but since your e-mail address is affiliated with your billing/mailing address, now they know details about your shopping history and use them to their advantage.

Past purchase information allows retailers to look up related items from their inventory and suggest additional merchandise you may be interested in purchasing. Not to mention, you’re constantly informed of daily deals, price cutbacks, future sales and upcoming must-haves. All of this puts you in the know as a consumer, which is right where they want you want to be.

Since you’re constantly aware of each catalog, every item for sale, it’s tougher to refrain from making purchases that you wouldn’t have known about otherwise. A trip to the store or the mall happens once in a while, a trip to your e-mail inbox happens multiple times a day.

Friending Equals Spending

Even if you don’t sign up for newsletters, you’re likely a user on at least one social media network. Now you have a chance to actually support and become a Facebook fan of the company you like most or follow their tweets. Who wouldn’t want the complete inside info straight from the source?

Consequently, this also means that you get all the information necessary to buy as much from them as you can. It doesn’t matter what it is – a new sandwich deal or a new car — your favorite corporations are going to promote it through social media. Showing up in newsfeeds throughout the world with pictures, updates, videos, polls and flashy promos is a free way to reach thousands of people, including you.

Charging Made Convenient

The 24/7 convenience of online shopping also allows online marketers to constantly bombard you with the bargain basement prices you can’t ignore. Forget driving, forget parking, forget lines, forget 16-year-old cashiers with attitude. It’s just you and your mouse. Even though you may love how must-have items are only a click away, their vast availability tends affect your credit card balance negatively. Plus, all those shipping and handling costs can add up, too.

The Social Media Credit Check You Didn’t Know About

PC World reports on a new trend being employed by both marketers and financial institutions when it comes to your online behaviors. They are not only examining your profile information and activity to determine whether you make a worthy credit customer, but even worse, they’re looking at your friends.

In addition to predicting which ads you are most likely to pay attention to, a company called Rapleaf is also helping to determine whether or not you present a risk for a credit card or a loan, according to FastCompany.com. Most of your personal information comes from sites like Twitter, Facebook, and MySpace, which is accessed without hacking or breaking any laws. You could also be unknowingly submitting your personal information to scam credit report companies – only sign up with trustworthy credit report companies.

Rapleaf claims that this information is only provided to marketers in order to appropriately target promotional offers. However, there is nothing stopping banks and other lenders from doing the same thing. Erica Sandberg, a personal-finance expert and columnist for CreditCards.com, is quoted by PC World as explaining, “creditors look at your network to see whether you would be a good credit customer.”

The bottom line? You really can’t be too careful.

Whether you’re a sucker for spending or are unknowingly providing creditors with more information than you’d like, the internet presents a serious risk to your credit score. Keep in mind that everything you do online is seen by someone else, and that intense “need” you often feel for a product is often the result of a marketing ploy directed specifically at you.