Lenders won't stalk you on Facebook anymore

An employee fixes part of a web server inside the Facebook Inc. Prineville Data Center in Prineville, Oregon.
Meg Roussos | Bloomberg | Getty Images
An employee fixes part of a web server inside the Facebook Inc. Prineville Data Center in Prineville, Oregon.

Maybe your number of friends on Facebook isn't a great way to gauge your creditworthiness after all.

The Wall Street Journal reported that analyzing social media data isn't necessarily a better way to predict individual credit ratings. This factor plus the numerous regulatory obstacles and overall creep factor have made online lenders to conclude that using social media as a judgment of creditworthiness is not effective, the Journal reported.

The report noted that the FTC has expanded its regulations of credit-reporting methods to include social-media patterns. Online lender LendUp had researched the possibility of using social media patterns in its assessments of potential borrowers, but told the Journal it was deterred by regulatory issues.

Rob Frohwein, CEO of online lender Kabbage, told the newspaper that social media data just aren't that useful. "Who your social circle is, or whether you play 'Mafia Wars'—we haven't seen that as very valuable," Frohwein told the Journal.

In 2014, there was some buzz about how banks could request access to clients' social media accounts to see whether they had a stable network of friends, which supposedly predicted their level of credit risk. Around the same time, a handful of finance start-ups sought to find better ways to help lenders predict the creditworthiness of potential borrowers by using behavioral data.

Facebook declined to comment to CNBC.

Read the full report in The Wall Street Journal.