More lending companies are mining Facebook, Twitter and other social-media data to help determine a borrower's creditworthiness or identity, a trend that is raising concerns among consumer groups and regulators.

Lending companies--some of which are backed with venture funding from Google Ventures, the venture-capital arm of Google Inc., and Accel Partners, an early Facebook Inc. investor--are looking at potential problems such as whether applicants put the same job information on their loan application as they posted on LinkedIn, or if they shared on Facebook that they had been let go by an employer. A small business that draws negative reviews on eBay also could undermine its chances of getting more credit, lending companies say.

The practice is being used largely by startups that grant smaller loans, but the concept seems likely to spread. Fair Isaac Corp., which provides the credit scoring used in more than 90% of lenders decisions, says it is weighing possibilities for incorporating social media.

'There could come a time where certain social media could be predictive and we're looking at that, but it isn't yet,' said Anthony Sprauve, senior consumer-credit specialist at FICO.

Companies pioneering the practice generally lend to borrowers with troubled credit histories or no bank accounts. They say the use of alternative scoring metrics helps make credit available to people who might otherwise be denied and that they are careful not to violatefederal credit laws.

Consumer advocates say the trend increases the chance borrowers, including small businesses, will be unfairly denied credit or saddled with higher interest rates based purely on their social-media presence. They say federal laws haven't kept up with the trend, leaving borrowers exposed.

San Francisco startup Flurish Inc., better known as LendUp, uses a mix of private data including credit bureaus and information gleaned from social media to help gauge borrowers' risk and verify identities. Applicants voluntarily share Facebook, Twitter and other sites, which LendUp executives say provides a fuller picture of potential borrowers. The more data applicants provide, the better their chances of approval can be, although they aren't required to give permission to access social media, according to LendUp.

'It's one of the tools we use to do underwriting,' said Sasha Orloff, co-founder and chief executive at LendUp, which is backed by companies including Google Ventures and expects to make 300,000 loans in 2014. 'Do you have 4,000 friends but none are that close, or do you have 30 people but they're very close? There are ways to measure how engaged and how strong your community ties are,' he said.

Regulators are watching the trend and trying to determine whether to police financial institutions' use of online data in credit scoring, officials say. The Consumer Financial Protection Bureau says it is aware that some businesses are exploring how to use social media to inform credit decisions. And the Federal Trade Commission will host a series of seminars this spring on emerging consumer-privacy issues, including the use of alternative scoring.

At Movencorp Inc., a mobile-only bank that does business as Moven, customers can link up social-media accounts such as Facebook, LinkedIn, and Twitter to learn about their own financialbehavior and make payments to friends. The company plans to offer loans and social-media activity will be one factor used in lending decisions, said Alex Sion, president of New York-based Moven, which became available to consumers in May 2013.

'The data we have on customers via social networks says more about them than their FICO,' Mr. Sion said, referring to the three-digit credit score widely used to estimate risk. 'You can make credit decisions based not on a faceless score, but on who you know.'

Companies are tapping into other sources of data, including PayPal and eBay accounts, to determine not just whether a borrower should get a loan but whether their credit line should be increased.

Small businesses seeking loans grant Atlanta-based Kabbage Inc. access to Amazon, eBay, Xero and other e-commerce or accounting sites to assess creditworthiness. Customers must link at least one such account for underwriting decisions. The company, which has extended more than $150 million in loans since launching in May 2011, also may take Facebook, Twitter and other social accounts into consideration when determining whether to increase a loan, company officials said. Kabbage looks at what customers are saying about the borrower's business and the quality of its customer service.