System and method for offering risk-based interest rates in a credit instrument

• US 20040243506A1
• Filed: 05/30/2003
• Published: 12/02/2004
• Est. Priority Date: 05/30/2003
• Status: Active Grant

• Current Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Original Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Inventors: Das, Jayanta
• Granted Patent: US 8,306,907 B2
• Time in Patent Office: Days
• US Class Current: 705/38
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 20/105 involving programming of a portable memory device, e.g. IC cards, "electronic purses"
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A system and method for communicating an offer to apply for a credit instrument is provided. A processing allows for processing credit history data. A calculating step allows for calculating a first plurality of interest rates based on the credit history data. A determining step allows for determining a second plurality of interest rates based on the first plurality of interest rates, wherein the second plurality of interest rates corresponds to a plurality of credit risk scores. Finally, a communicating step allows for communicating the offer to apply for a credit instrument in an initial communication with an offeree, the offer disclosing the second plurality of interest rates. An apparatus that calculates the interest rates used in the offer is also provided.

Claims

1. A method of communicating a multi-tiered offer to apply for a credit instrument comprising:

processing credit history data;

calculating a first plurality of interest rates based on said credit history data;

determining a second plurality of interest rates based on said first plurality of interest rates, said second plurality of interest rates corresponding to a plurality of credit risk scores; and

communicating said offer to apply for a credit instrument in an initial communication with an offeree, said offer disclosing said second plurality of interest rates.

2. The method of claim 1, further comprising:

receiving a reply from said offeree;

determining a credit risk score specific to said offeree;

selecting one of said second plurality of interest rates based on said specific credit risk score; and

providing said credit instrument to said offeree, wherein said credit instrument is associated with said selected interest rate.

3. The method of claim 1, wherein said first plurality of interest rates is a continuous spectrum of interest rates.

4. The method of claim 1, wherein said second plurality of interest rates is a continuous spectrum of interest rates.

5. The method of claim 1 wherein a credit card issuer communicates said offer to said offeree, and said offeree is a potential credit card applicant.

6. The method of claim 1 wherein said credit instrument is a credit card account.

7. A method of communicating an offer to apply for a credit instrument, comprising:

determining a first plurality of interest rates corresponding to a first plurality of credit risk scores;

communicating an offer to apply for a credit instrument to an offeree, said offer disclosing said first plurality of interest rates;

receiving a reply from said offeree;

determining a credit risk score specific to said offeree;

selecting one of said first plurality of interest rates based on said specific credit risk score; and

providing said credit instrument to said offeree, wherein said credit instrument is associated with said selected interest rate.

8. The method of claim 7, further comprising, prior to said step of determining said first plurality of interest rates:

processing credit history data; and

calculating a second plurality of interest rates based on said credit history data,

wherein the first plurality of interest rates are selected based on said second plurality of interest rates.

9. A data processing apparatus for generating credit rating information and a plurality of interest rates corresponding to a plurality of credit risk scores, comprising:

a processor;

a memory operatively connected to said processor, said memory containing a program adapted to be executed by said processor, wherein said program is for receiving credit history data and for calculating a plurality of interest rates corresponding to a plurality of credit risk scores, said credit risk scores based on said credit history data; and

an input/output apparatus, operatively connected to at least one of said memory and said processor, for input of the credit rating information, and for output of said plurality of interest rates, said plurality of interest rates corresponding to said plurality of credit risk scores, said plurality of interest rates to be used in an initial offer to apply for a credit instrument, wherein the initial offer includes the plurality of interest rates.

10. The apparatus of claim 9, wherein the input/output apparatus is operatively connected to a second data processing apparatus for transmitting credit history information to the processor through the input/output apparatus.

11. The apparatus of claim 9, wherein the input/output apparatus is operatively connected to a generating device for generating offers to offerees based on data received from the processor through the input/output apparatus.

12. A system for generating credit product offers, comprising:

a computer for receiving credit history information, processing said credit history information, generating a plurality of interest rates corresponding to a plurality of credit risk scores, and outputting said plurality of interest rates;

an offer generator for receiving said plurality of interest rates corresponding to said plurality of credit ratings, generating an offer for one of a credit instrument and a line of credit based on said plurality of interest rates, wherein said offer discloses said plurality of interest rates.

13. The system of claim 12, further comprising:

a data output device for transmitting said credit history information to said computer.

14. The system of claim 12, wherein said offer generator is further configured to cause said offer to be communicated to an offeree.

15. The system of claim 14, wherein said offer is communicated via electronic communication.

16. The system of claim 14, wherein said offer is communicated via mail.

17. A computer-readable medium encoded with computer program code to generate interest rates corresponding to credit risk scores, the program code effective to perform the following:

process credit history data; and

calculate a first plurality of interest rates based on said credit history data, said first plurality of interest rates corresponding to a first plurality of credit risk scores, said first plurality of interest rates to be used in determining a second plurality of interest rates corresponding to a second plurality of credit risk scores, said second plurality of interest rates to be disclosed in an initial communication with an offeree comprising an offer to apply for a credit instrument.

18. A method of communicating an offer to apply for a credit instrument comprising:

processing credit history data;

calculating a plurality of interest rates based on said credit history data, said plurality of interest rates corresponding to a plurality of credit risk scores; and

communicating an offer to apply for a credit instrument in an initial communication with an offeree, said offer disclosing said plurality of interest rates.

19. The method of claim 18, further comprising:

receiving a reply from said offeree;

determining a credit risk score specific to said offeree;

selecting one of said plurality of interest rates based on said specific credit risk score; and

providing said credit instrument to said offeree, wherein said credit instrument is associated with said selected interest rate.