News Column

Researchers Submit Patent Application, "Real-Time Interactive Credit Score Improvement Coach", for Approval

June 26, 2014



By a News Reporter-Staff News Editor at Politics & Government Week -- From Washington, D.C., VerticalNews journalists report that a patent application by the inventor Howe, Justin Xavier (Oakdale, NY), filed on December 4, 2012, was made available online on June 12, 2014.

The patent's assignee is Mastercard International Incorporated.

News editors obtained the following quote from the background information supplied by the inventors: "It is common knowledge that having a high credit score is key to a consumer's ability to qualify for and benefit from low interest rate mortgages, loans, and credit cards. Surprisingly, however, most consumers do not have a good understanding of how one's credit score is obtained, or what factors influence a credit score in both a negative and positive way. Most likely, this is, in part, a result of an unwillingness to invest the time and effort to learn more about how one can improve his or her credit score. Also, it is certainly not always easy to find the correct tools, resources, or advisors to effectively improve one's credit score. Doing so requires a certain amount or perseverance and continued investigation, particularly when credit rating agencies constantly change their methodologies.

"It is clear that many consumers need assistance with managing their finances. For example, a report dated April 2003 report from the Consumer Federation of America and the National Consumer Law Center estimated that nearly 9 million people in financial trouble contacted credit counseling organizations annually. IRS inventory records listed 788 approved tax-exempt credit counseling organizations as of November 2005, and revenue reported for Tax Year 2000 for this tax-exempt industry was approximately $1 billion. Clearly, consumers have a need for assistance and education in improving their credit scores

"There are a number of internet-based resources available for obtaining periodic (monthly) updates of one's credit score. Such services are available, for example, on Quizzle.com and Credit Karma. These and similar sites rely on monthly updates of credit file information obtained from credit reporting agencies (CRAs). Since CRAs receive this information once a month from the banks, however, they cannot provide real-time responses that allow a consumer to directly and immediately correlate one's actions or account activity with one's credit score.

"Having the knowledge of how one's credit score is determined is just a first step. One must also recognize how to integrate that knowledge into one's daily spending habits. This is particularly difficult without the benefit of some type of feedback correlated with one's activities. Without the availability of real-time credit data, a corrective real-time response is unlikely if not impossible.

"There are, of course, general recommendations which cardholders can implement to improve their credit scores. For example, cardholders can usually set up an automatic payment for their debt payments, or register to receive reminders. There are other more subtle influences on one's credit score, however, that neither a bank, nor any currently available internet-based service, can provide alerts for. For example, notification mechanisms do not exist for factors that drive good credit scores, such as percentage of credit line utilized, or the debt-to-income ratio.

"At the most, some credit score providers provide pre-generated bullet point messages with recommendations about how a consumer can improve one's credit score, but are otherwise unhelpful on a personal interactive level. Such general recommendations may include: 'Reduce your balance'; 'Pay your bill every month'; and 'You need a longer credit history.'

"To be more useful and relevant, credit improvement recommendations are needed that incorporate more about a particular cardholder's financial activity than can be gleaned from a report that is only updated monthly. Furthermore, cardholders need to know the cause of credit score increases or decreases over time in order to modify their behavior.

"There is, therefore, a need in the art for a method and system for real-time correlation of a consumer's behavior to a credit score and for providing real-time alerts of credit score triggers to allow a consumer to understand and correct his or her financial behavior in real-time."

As a supplement to the background information on this patent application, VerticalNews correspondents also obtained the inventor's summary information for this patent application: "The present invention provides a method and system for real-time correlation of a consumer's behavior to a credit score and for providing real-time alerts of credit score triggers to allow a consumer to understand and correct his or her financial behavior in real-time.

"A method is provided for providing a credit coaching service for providing real-time recommendations to improve a credit score for a user includes retrieving credit report data issued from a credit reporting agency; accessing in real-time financial transactions by the user from a datastream from at least one financial source; and determining a corrective action by the processor in response to one of the real-time financial transactions by the user that adversely affects the credit score for the user. Preferably, an alert comprising the corrective action is transmitted to the user in response.

"In various aspects, the alerts can be communicated as one or more of an SMS text message, a smartphone alert, a robo-dialed telephone call, an e-mail, and a listing accessible to the user via a website link to the credit coaching service.

"In an additional aspect, the real-time financial transactions can include at least one of credit card transactions, debit card transactions, installment loan payments, checking account transactions, PIN debit/signature transactions, ATM card transactions, chip card transactions, smart card transactions, Near-Field Communication transactions and smartphone transactions.

"In yet another aspect, the method can include maintaining a prioritized queue of recommended credit behaviors. The method preferably focuses on a highest priority behaviors in the queue. If a credit transaction is detected that adversely affects the user's credit score, the corrective action that is determined in response is directed to furthering the highest priority credit behavior in the queue.

"Likewise, if a debit transaction is detected that adversely affects the user's credit score, the corrective action that is determined in response is directed to furthering the highest priority debit behavior in the queue.

"In various aspects, in response to a consistent demonstration over a predetermined period of time of the highest priority behavior in the queue by the user, the credit behavior queue and/or debit behavior queue is reprioritized.

"In a preferred aspect, the method includes continuously recalculating the user's credit score in response to each real-time financial transaction.

"In an additional aspect, the method further includes calculating a plurality of performance metrics affecting the credit score from the real-time financial transactions, periodically retrieving updated credit reports, and providing a historical timeline of the calculated credit scores and plurality of credit score parameters, which can be displayed on a graphical user interface.

"In various aspects, the performance metrics can include one or more of Debt-To-Income ratio, credit line utilization, number of transactions, and growth in savings or debits.

"A system is also provided for providing a credit coaching service for providing real-time recommendations to improve a credit score for a user. The system includes a data interface periodically retrieving credit report data issued from a credit reporting agency and accessing in real-time financial transactions by the user over a datastream from at least one financial source; a database operatively connected to the data interface, the database receiving and storing the credit report data and real-time financial transactions; and a processor operatively connected to the database retrieving and analyzing the credit report data and real-time financial transactions, calculating the credit score for the user, and determining a corrective action in response to one of the real-time financial transactions adversely affecting the credit score for the user.

"Preferably, an alert comprising the corrective action is transmitted to the user in response.

"In one aspect, the real-time financial transactions include at least one of credit card transactions, debit card transactions, installment loan payments, checking account transactions, PIN debit/signature transactions, ATM card transactions, chip card transactions, smart card transactions, Near-Field Communication transactions and smartphone transactions.

"A computer readable medium storing instructions is also provided that when executed by a processing device, cause the processing device to provide real-time recommendations to improve a credit score for a user by retrieving credit report data issued from a credit reporting agency, accessing in real-time financial transactions by the user from a datastream from at least one financial source, determining a corrective action in response to one of the real-time financial transactions by the user adversely affecting the credit score for the user, and transmitting an alert comprising the corrective action to the user.

"In one aspect, the computer readable medium can include one of a chip card, a smart card, a Near-Field Communication card, and a smartphone.

"In addition to the above aspects of the present invention, additional aspects, objects, features and advantages will be apparent from the embodiments presented in the following description and in connection with the accompanying drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

"FIG. 1 is a schematic representation of an embodiment of a system of the present disclosure.

"FIG. 2 is a flow chart representation of a first phase of an embodiment of a method of the present disclosure.

"FIG. 3 is a flow chart representation of a second phase of the embodiment of the method of FIG. 2, including providing real-time alerts to a user in response to a financial transaction."

For additional information on this patent application, see: Howe, Justin Xavier. Real-Time Interactive Credit Score Improvement Coach. Filed December 4, 2012 and posted June 12, 2014. Patent URL: http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.html&r=971&p=20&f=G&l=50&d=PG01&S1=20140605.PD.&OS=PD/20140605&RS=PD/20140605

Keywords for this news article include: Legal Issues, Mastercard International Incorporated.

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Source: Politics & Government Week


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