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

• US 8,306,907 B2
• Filed: 05/30/2003
• Issued: 11/06/2012
• 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
• Primary Examiner(s): FELTEN, DANIEL S
• Application Number:
  US10/448,230
• Publication Number:
  US 20040243506A1
• Time in Patent Office: 3,448 Days
• Field of Search: 705/38, 705/39, 705/35, 705/14, 705/1
• 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, by a computer processor, credit history data;

calculating, by the computer processor, a first plurality of interest rates based on said credit history data;

determining, by the computer processor, 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 that comprise a spectrum of credit risk scores; and

communicating, said multi-tiered offer to apply for a credit instrument in an initial communication with an offeree, said offer disclosing said second plurality of interest rates corresponding to the plurality of credit risk scores, wherein the multi-tiered offer comprises a single offer that is an initial communication with the offeree and wherein the plurality of credit risk scores is not specific to the offeree.

2. The method of claim 1, further comprising:

receiving a reply from said offeree;

determining, by the computer processor, a credit risk score specific to said offeree;

selecting, by the computer processor, 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.

13. The method of claim 1, wherein said offer is communicated to the offeree without any prior communication with the offeree or a request for said offer from the offeree.

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

determining, by a computer processor, a first plurality of interest rates corresponding to a first plurality of credit risk scores, wherein the first plurality of credit risk scores comprise a spectrum of credit risk scores;

communicating the 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, by the computer processor, a credit risk score specific to said offeree, wherein the credit risk score is determined following the receipt of the reply;

selecting, by the computer processor, 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, by the computer processor, credit history data; and

calculating, by the computer processor, 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 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 and said offer is communicated to an offeree without any prior communication with the offeree;

an reply receiver for receiving a reply from an offeree, processing said reply, computing a credit risk score specific to the offeree who replied, and selecting one of said plurality of interest rates based on said specific credit risk score.

10. The system of claim 9, further comprising:

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

11. The system of claim 9, wherein said offer is communicated via electronic communication.

12. The system of claim 9, wherein said offer is communicated via mail.

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

processing, by a computer processor, credit history data;

calculating, by the computer processor, a first plurality of interest rates based on said credit history data wherein said first plurality of interest rates is a continuous spectrum of interest rates;

determining, by the computer processor, 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 corresponding to a spectrum of credit risk scores and is a continuous spectrum of interest rates;

communicating said multi-tiered offer to apply for a credit instrument in an initial communication with an offeree, said offer disclosing said second plurality of interest rates in a single offer, wherein a credit card issuer communicates said offer to said offeree, and said offeree is a potential credit card applicant,

and wherein the plurality of credit risk scores is not specific to the offeree;

receiving a reply from said offeree;

determining, by the computer processor, a credit risk score specific to said offeree;

selecting, by the computer processor, 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 wherein said credit instrument is a credit card account.