A traditional credit score is a numerical expression based on a statistical analysis of a person’s credit files, to represent the creditworthiness of that person. A credit score is primarily based on credit report information, typically sourced from credit bureaus.
The credit score is really a measure of how well you play the traditional financial game. The game is fixed by financial institutions that use your credit score to reduce their risk of default on payments.
As a result of overburdened financial institutions, a new generation of social consumers using social applications will form to emulate those old financial institutions. Social capital, creative capital, and intellectual capital will increasingly behave like tangible assets of the past.
Emergence of a Social Credit Score
A social credit score will emerge as a means of framing the shift to creation of social capitalism.Like financial capitalism, social capitalism is the ability to convert social currency, backed by future productivity of represented ideas, into economic gains.
In the old days entrepreneurs would approach banks and venture capitalist to get funding for their business. Entrepreneurs would beg, borrow or steal for a chance to pitch an idea to vulture capitalist. And when they were lucky enough to secure backing, the money men would often walk away with a sizeable chunk of the company in return for a mere pittance. Banks would lend money based on credit scores. Vulture capitalist would invest money based on the “score” of an idea and whether the idea would produce economic gains. The money game is changing.
Entrepreneurs used to need several million dollars in order to get a company off the ground. Now they can get started simply by testing their business model and related product ideas with thousands of people online. Crowd collaboration enables entrepreneurs to borrow knowledge needed to complete, scale and distribute their creations. A viable product or process that enhances people’s productivity and creates value unfulfilled is quickly verified by crowd reactions and consumption. When crowds begin to consume our individual product, process, knowledge or idea (represented by our profile and content) that consumption represents social currency.
Consider Twitter and Facebook. Both represent the means by which people create social currency. Both platforms leverage the old game of advertising to create economic gain created from people using these platforms. Entrepreneurs are using these platforms to leverage social currency into their own economic gains. Just consider the gaming company Zinga. Billions of economic value has been created by enabling people to create social currency which others use to create social and economic gains.
The things we are learning about social media are not about making money from social media rather the means of creating economic value from social currency. Social currency represents information shared which encourages further social encounters and each encounter creates social value. Social currency, and the value it represents, is a social system which points to financial gains created by innovation.
The digitally enabled society is creating some interesting similarities to the old credit score models as well as differences. Instead of using financial variables to determine ones credit score social variables are appearing as the means to determine a social credit score. These variables are social, creative, and intellectual capital we individually and collectively leverage to create social currency. Our profiles represent indications of social, creative, and intellectual capital. The content we create, consume and share represents social currency. Finally, search engine placement registers your social credit score based on value recognition and consumption. Have you Googled your name or the key words used to represent your content lately?
The next shifts will be in the area localizing, mobilizing, organizing, vetting, classification, and normalization social capital, creative capital, and intellectual capital. These elements will contribute to one’s social credit score which buys access to information and knowledge that can be used to create more social currency for consumption.
Regardless of your digital commitment, one thing is certain. There is information about you online. You might not have placed it there, but it exists for the world to see.
Your Social Credit Score is already emerging, whether you are aware of it or not. It is not something you can currently check on a web page or send off for. Currently it won’t affect your ability to get a car or a house but it is already affecting your employment status.
Instead of asking “what is in your wallet” people will know “what is in your brain” and are you using it to create value for others to consume.