Structured Reference Credit System Using Linked Data Packages
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Solution Overview
Problem
Conventional credit decision systems are ineffective in evaluating creditworthiness when credit history information is limited or absent, hindering the availability of prudent financial credit, especially in developing economies and subpopulations with restricted data access.
Innovation Solution
A structured reference credit system that utilizes linked data packages generated from information about applicants, referencers, and other third parties, applying credit outcome models to make informed credit recommendations, even in the absence of complete credit history.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If conventional credit decision systems are used, then credit decisions can be made based on available data, but the system becomes ineffective when credit history information is limited or absent
Solution Approach 1:
The patent introduces referencers as intermediary entities who bridge the gap between applicants with limited credit history and lenders. Referencers provide alternative data points and recommendations that enable credit evaluation in the absence of traditional credit history, resolving the contradiction by expanding data sources without compromising evaluation reliability
Solution Approach 2:
The patent transitions from evaluating creditworthiness based solely on traditional credit history (one dimension) to a multi-dimensional approach that incorporates referencer data, application information, and alternative data sources. This dimensional expansion enables reliable evaluation even when conventional credit history is unavailable
2Reliability
If credit history information is required for lending decisions, then prudent lending can be ensured, but financial credit becomes unavailable to applicants with limited or no credit history
Solution Approach 1:
Referencers serve as intermediaries that enable lenders to extend credit to applicants without traditional credit history while maintaining prudent lending standards. The referencers provide sufficient data points to assess creditworthiness, making credit available to underserved populations without compromising lending reliability
Solution Approach 2:
The credit evaluation system is designed to handle multiple types of applicants uniformly, whether they have extensive credit history or none at all. By incorporating referencer data and alternative information sources, the system provides universal credit evaluation capability that maintains prudent lending standards across diverse applicant populations
3Reliability
If more data sources are incorporated into credit evaluation, then credit risk evaluation improves, but system complexity increases
Solution Approach 1:
The patent segments the credit evaluation process into distinct modules: applicant data collection, referencer data collection, data linkage, risk assessment, and lending decision. This segmentation manages complexity by organizing multiple data sources and processing steps into manageable, modular components that can be implemented systematically
Data Source
AI summary
A structured reference credit decision device includes a database configured to store information related to applicants, potential customers, referencers, potential referencers, lenders, and other third parties, a fetch data component coupled with the database, the fetch data component configured to receive input application information, fetch relevant information from the database, based on the application information, related to a subject applicant of the input application information and at least one referencer, and generate a plurality of linked data packages based on the fetched information, and an evaluation device coupled with the fetch data component, the evaluation engine configure to apply credit outcome models to the plurality of linked data packages and generate a recommendation relative to the subject applicant or application.