In my internet marketing class today, our guest speaker talked about privacy issues. He mentioned the fact that companies can use any pieces of information they have about you to make credit decisions.

For example, let's say a credit card company knows that you spent over $1000 for alcohol last month. And let's suppose they know that people who do this are much more likely to default on their payments. Then if they want, they can use this information to reject your request for credit.

But of course there are lots of problems with this. What if you owned a small liquor store? What if you liked really expensive wine? These companies may not know this about you, and they may be rejecting you based on incomplete information.

The fact that you bought $1000 worth of alcohol last month does not mean that you will default on your payments. (Or as a statistics major would say, "correlation is not causation.") But some companies might not care, because to them it'd be more profitable to avoid offering credit to everyone in a certain group (even if it's totally unfair.)