WO2002011045A2 - Method for repairing and maintaining consumer credit in a financial management and planning system - Google Patents

Description

METHOD FOR REPAIRING AND MAINTAINING

CONSUMER CREDIT IN A FINANCIAL MANAGEMENT AND PLANNING SYSTEM

RELATED APPLICATIONS

This application is a continuation in part of pending application Serial No. 09/514,919.

TECHNICAL FIELD The present invention relates generally to financial management and planning services offered over a global computer network, and more particularly, the present invention relates to a financial planning system whereby a consumer can receive credit maintenance services and can also apply for or be provided pre-qualification and/or pre- approval of and then receive a wide variety of financial services through local, regional, national, and global partnered financial institutions, all over a global computer network.

BACKGROUND OF THE INVENTION Traditionally, consumers transacted all financial matters through non-electronic means. This practice entailed labor- and time- consuming handling and processing of vast quantities of paper, as well as communications through paper correspondence and voice methods. Not only is a non-electronic process labor and time intensive, it results in elevated costs for both the financial institution and the consumer.

Throughout the world, consumers' creditworthiness drives commercial transactions. Whether applying for a credit card, financing an automobile or residence purchase, or performing nearly every other type of non-cash financial transaction, consumers' credit histories are scrutinized by credit grantors.

Credit scoring is a system creditors use to help determine whether to give credit. Information about consumers and their credit experiences, such as bill-paying history, the number and type of accounts, late payments, collection actions, outstanding debt, and the age of accounts, is collected from credit applications and credit reports. Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points — a credit score ~ helps predict how creditworthy an applicant is, that is, how likely it is that the applicant will repay a loan and make the payments when due. Credit scoring is based on real data and statistics, so it usually is more reliable than subjective or judgmental methods. It treats all applicants objectively. Judgmental methods typically rely on criteria that are not systematically tested and can vary when applied by different individuals. To develop a model, a creditor selects a random sample of its customers, or a sample of similar customers if their sample is not large enough, and analyzes it statistically to identify characteristics that relate to creditworthiness. Then, each of these factors is assigned a weight based on how strong a predictor it is of who would be a good credit risk. Each creditor may use its own credit scoring model, different scoring models for different types of credit, or a generic model developed by a credit scoring company.

Under the Equal Credit Opportunity Act, a credit scoring system may not use certain characteristics like race, sex, marital status, national origin, or religion as factors. However, creditors are allowed to use age in properly designed scoring systems. But any scoring system that includes age must give equal treatment to elderly applicants. Credit scoring models are complex and often vary among creditors and for different types of credit. If one factor changes, a consumer's score may change, but improvement generally depends on how that factor relates to other factors considered by the model. Only the creditor can explain what might improve a score under the particular model used to evaluate a credit application. Nevertheless, scoring models generally evaluate the following types of information in an applicant's credit report:

• Payment of bills on time: Payment history typically is a significant factor. It is likely that a credit score will be affected negatively if a consumer has paid bills late, had an account referred to collections, or declared bankruptcy, if that history is reflected on the credit report.

• Amount of outstanding debt: Many scoring models evaluate the amount of debt the consumer has compared to his credit limits. If the amount owed is close to the credit limit, that is likely to have a negative effect on the score.

• Length of credit history: Generally, models consider the length of a consumer's credit track record. An insufficient credit history may have an effect on a score, but that can be offset by other factors, such as timely payments and low balances.

• Recent credit activity: Many scoring models consider whether a consumer has applied for credit recently by looking at "inquiries" on the credit report when the consumer applies for credit. If a consumer has applied for too many new accounts recently, that may negatively affect the score. However, not all inquiries are counted, inquiries by creditors who are monitoring an account or looking at credit reports to make "prescreened" credit offers are not counted. • Number and types of credit accounts: Although it is generally good to have established credit accounts, too many credit card accounts may have a negative effect on the score. In addition, many models consider the type of credit accounts. For example, under some scoring models, loans from finance companies may negatively affect the credit score.

Scoring models may be based on more than just information in the credit report. For example, the model may consider information from a credit application as well as from the applicant's occupation, length of employment, or whether the applicant owns a home. Federal Trade Commission, "Credit Scoring", August 1998, available at "http://www.ftc.gov/bcp/conline/pubs/credit/scoring.htm", accessed February 27, 2000.

Studies show that an estimated 80% of all Americans have "bad" credit histories, with an average of at least 4 negative items on each person's credit report. Negative items arise from consumers' failures to make timely payments to creditors, the entry of monetary judgments against consumers, bankruptcies, and other activities which reflect unfavorable conduct with respect to financial affairs.

In addition, people with "good" credit histories face the reality that the credit bureaus enlisted to maintain credit histories historically maintain erroneous credit histories. Research indicates that at least 40% of Americans have an incorrectly reported item on their credit report, due either to errors by the credit bureaus or the creditors reporting information to the bureaus. Therefore, an overwhelming majority of consumers either have bad credit that they would like to repair or good credit that they would like to maintain. Under current conditions, however, once a consumer learns of problems with his credit history through acquisition of his credit report from one of the bureaus, it can take several months and repeated efforts to repair credit history blemishes. Further, a consumer needs to know whether negative entries are correct and need repair or erroneous and need removal. Frequently, consumers turn to credit repair companies to assist with their credit report needs. Credit repair agencies are abundantly available; however, their reputation with creditors, credit bureaus, and consumers is such that these entities usually cause more harm than good. Credit repair facilities are notoriously overpriced and inefficient, often frustrating consumers who enlist their services, along with the creditors and credit bureaus involved in specific credit history incidents. So, other than taking on the task themselves, consumers have historically been without a means to efficiently repair and maintain their credit histories.

Assuming a consumer's credit history is such that it qualifies the consumer for financing, product proliferation in the financial services market has flooded the typical consumer with an astounding array of options, with no means to conveniently and objectively select the best combination of these options. In this same vein, consumers often maintain their financial assets with a multitude of financial institutions. Rarely is one institution capable of satisfying all of a consumer's needs, whether it be conventional banking, brokerage services or credit repair and maintenance services, to name a few examples. This state of the financial world puts the onus on consumers to carefuiiy manage and track the various accounts with the various financial institutions. Nor do the financial institutions perform any proactive approvals for a wide range of financial products, other than a mailing-type of advertisement sent to a consumer, in response to which the consumer must, if interested, complete a more-detailed credit application.

Further, if a consumer desires a loan or other similar transaction that requires an application, say a credit card application, the consumer usually is required to independently apply to each creditor. Constantly filling in blanks requesting the same information from application to application is a misallocation of consumer time and energy and often dissuades consumers from making the effort to even apply for credit.

Similarly, a problem exists for financial institutions in the event an applicant is turned down because he has a low credit rating. If a consumer applies to a financial institution for credit, a loan, lease or mortgage, that institution initially performs a check of the applicant's credit history. Every applicant must satisfy specific criteria in order to qualify for the financial institution's services. Those applicants who qualify may accept and receive financial services from the institution. However, those applicants who do not qualify and are therefore turned down typically break contact with the institution. This process often results in the loss of potential business from those applicants whose credit histories could improve, which improvements could eventually allow them to qualify for the services for which the applicant originally applied. Additionally, the institutions which actually approve higher-risk applicants for financial services, albeit at higher interest rates because of the applicant's worse-than-preferred but better-than-unacceptable credit history, are generally not able to track improvements to such applicants' credit histories, improvements to which would enable the institution to enjoy repeat business from the customers, such as mortgage refinancing and the like.

Another problem in today's global economy is the lack of an international credit scoring system. Today's standard, FICO, as issued by Fair Isaac and Company, Inc., seems to account only for consumer credit within the United States. Not only is the score based solely upon domestic factors, but it is also used exclusively in a domestic sense. This is not a realistic score of credit for those people who work internationally, own property overseas, or even just travel frequently outside the country. For example, a fifty year old who has never been to or completed transactions within the United States could move to the United States from another country and have a completely blank credit report and, therefore, no FICO score. Clearly, such a lack of credit history is not accurately representative of this sort of person's creditworthiness. Previous efforts have been made to provide convenient and efficient financial sei vices, such as those described in U.S. Patent No. 5,878,403 to DeFrancesco et al. (the '403 patent); U.S. Patent No. 5,940,811 to Norris (the '811 patent); U.S. Patent No. 5,960,411 to Hartman et al. (the '411 patent); and U.S. Patent No. 5,706,442 to Anderson et al. (the '442 patent), each of which is incorporated herein by reference. However, as discussed below, none of these references, either alone or combination, offer consumers and creditors alike the ability to engage in a full spectrum of financial transactions in a convenient, efficient, and cost-effective manner. The '403 patent describes a system for receiving, routing and reporting on credit applications, primarily directed towards automobile dealerships applying to funding sources on behalf of their customers. A dealership collects information on the customer, including a credit report from one or more bureau, and then applies to funding sources "shotgun" style or one at a time. The result is then forwarded to the dealership for analysis.

The '81 1 patent describes a method and apparatus for processing financial transactions automatically, including loans, applications for credit, establishment of accounts and other transactions that would normally take place at a bank. This invention is directed primarily to closed loop financial transactions.

The '41 1 patent describes a method and system for placing an order to purchase an item via the Internet. More specifically, the '411 patent is directed towards a purchasing system whereby items can be ordered without the use of a "shopping cart" and without re-entering consumer data already on file.

The '442 patent describes a system for delivering financial services to customers of various financial institutions. This invention enables customers of banks, stock brokerages, credit card companies and insurance companies to access their up to date account information at their convenience.

While these prior attempts provide improved methods for performing specific types of financial activities, they, alone or in combination, leave significant shortfalls in the resolution of specific problems. For example, the invention described in the '403 patent is geared primarily towards automobile dealerships, and possibly other similar businesses. Further, an application process has to be initiated by the dealership; an applicant is not automatically approved for financial services regardless of whether an application was filed. The invention of the '403 patent also only matches the applicant with services from the first institution that is willing to provide them; there is no "shopping" for the best terms available. The invention of the '81 1 patent is comprised primarily of an isolated kiosk type device which is limited in its ability to apply to multiple financial institutions. In addition, this device cannot be used at a home or an office. All transactions must take place at the locus of the kiosk. The invention described in the '442 patent operates on a oneway only premise. For example, a consumer can derive information about her account with a financial institution, but the invention does not allow the customer to apply for any financial services. A consumer must still manually apply to the financial institution for services in order to receive an account that could be used with the invention of the '442 patent.

Accordingly, there is a need in the art for an effective method of repairing and maintaining good consumer credit while reducing the consumer's burden.

SUMMARY OF THE INVENTION

The present invention solves significant problems in the art by providing a computer- implemented system utilizing a global communications network to provide a financial management and planning system. Generally described, the present invention provides a . computer-implemented system utilizing a global communications network to provide a financial management and planning system which provides credit maintenance services, an individually- tailored information account, an international credit scoring system, a simplified financial service application process, means for business partners to recapture lost consumers, and means for analyzing periodically a consumer's credit qualifications and alerting the consumer to new financial services being offered as a result of improved credit qualifications.

In a preferred embodiment, the present invention provides a method for restoring and maintaining a person's credit score, comprising the steps of receiving the person's credit information; analyzing the credit information so as to determine any negative entries thereupon; processing the negative entries in an effort to remove the negative entries from the credit information; receiving revised credit information based on the processing of the negative entries; analyzing the revised credit information so as to determine any remaining negative entries thereupon; and continuing to process the negative entries until all of the negative entries: are removed from the credit information.

Accordingly, it is an object of the present invention to provide an effective method of repairing and maintaining good consumer credit while reducing the consumer's burden.

This and other objects, features, and advantages of the present invention will become apparent upon reading the following specification when taken in conjunction with the accompanying drawings.

BRIEF DESCRIPTION OF THE DRAWINGS FIG. 1 is a block diagram of a preferred embodiment of the overall business model according to the present invention.

FIG. 2 is a schematic view of a preferred embodiment of the one-step processing method and system according to the present invention. FIG. 3 is an illustration of a preferred embodiment of the credit processing procedure according to the present invention.

FIG. 4 is a block diagram of a preferred embodiment of the individualized information account according to the present invention.

FIG. 5 is a schematic view of a preferred embodiment of the pro-activity pre-qualification process according to the present invention.

FIG. 6 is a schematic view of a preferred embodiment of the loan finalization process according to the present invention.

FIG. 7 is a schematic view of a preferred embodiment of the credit facility approval analysis according to the present invention.

FIG. 8 is a block diagram of a preferred embodiment of the e- business partnership program according to the present invention.

FIG. 9 is a block diagram of a preferred embodiment of the international credit scoring system according to the present invention. FIG. 10 is an illustration of types of negatives on a credit report that can be deleted through the credit maintenance program of the present invention.

FIG. 11 is a diagrammatic view illustrating the relationship between consumers, credit providers, and the financial planning and management system of the present invention.

FIG. 12 is a block diagram depicting the debt negotiation process.

FIG. 13 is a block diagram illustrating the extranet feature of the present invention. FIG. 14 is an illustration of the mortgage payment calculator, featuring slider bars, of the present invention. DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT OF THE PRESENT INVENTION

Referring to FIG. 1 of the drawings, in which like numerals indicate like elements throughout the several views, in a preferred embodiment, FIG. 1 reflects a number of the programs, goods and services that are offered according to the invention. The initial step of registering 2 members involves gathering vital customer information, through correspondence, voice, global computer network or other communications device, for use in performing financial management and planning services. Once registration has been completed, the system automatically welcomes members via electronic mail and provides basic information about the service provided by the system for financial management and planning. A parcel of individualized, introductory information is then prepared and mailed to the member, some of which is returned (i.e. self addressed, pre-paid envelopes for credit reports) to commence the credit maintenance services 4. These credit maintenance services 4 are detailed more specifically in FIG. 3. A debt negotiation program 6, designed to help members settle any outstanding debts, augments the credit maintenance services 4. Through use of the credit maintenance services 4 and debt negotiations 6, the member's credit rating should improve. This improved credit rating will allow the member to qualify for an increasing array of financial services. Therefore, in a preferred embodiment of the invention, the system would begin to search 8 for goods and services available to the member. Such goods and services could include mortgages 12, auto loans 14, student loans & services 16, leases 18, and credit cards 20. In addition to pairing the member with goods and services 8, the system would provide 10 finance- related services to assist the member in financial growth. For example, the member could take advantage of the on-line bank 22, the information and financial services 24, the e-business partnership program 26, see FIG. 8, and the on-line mall with partnered vendors 28.

Turning now to FIG. 2, a one-step method and system for applying for new financial services is portrayed in schematic form. Information about a member is generally input in three ways: initial information 40 is taken at the registration level 2, update information 42 is supplied by the member on a continuing basis as the member's situation changes, and the credit bureau information 44 is added as it becomes available, about every 15 to 30 days. Information could also be derived from the entity, if any, that referred the member to the registration level 2. This information is then input to the member database 46, which contains all the information available to the system about each member. This information is compiled, stored and associated with the individual member. This information is then retrieved from the member database 46 every time a new application is filed 48. In this manner, an applicant can apply for various financial services, without having to complete different applications requiring the same information multiple times. That is, a member will not have to input their basic financial information more than once, unless that information needs to be updated.

FIG. 3 is generally representative of the credit maintenance method. Initially, client information is obtained 60 from the marketing office. Processor One 62 then orders 64 the client's credit reports. Processor Two 66 logs the credit request 64 and the issuance of a welcome kit 68. Upon receipt 70 of the credit reports, the customer 69 places 72 the reports in a self-addressed, postage-prepaid envelope that was included in the welcome kit and sends 74 them to be processed. The reports are received 80 and then forwarded to Processor Three 82. Processor Three 82 scans the credit reports into digital format and then destroys the reports 84. Processor Four 86 then directs 88 the scanned reports into its proper file on the database 46. The file is returned to Processor Two 90, who logs all deletions 92 of bad credit on the credit report. Different types of negatives can be deleted through different methods, see FIG. 10. Processor Five 94 fills out 96 any necessary dispute forms and then passes the forms off to Processor Six 98 who prepares 100 and mails 102 the dispute forms to the Bureaus and the Postmaster. The mailing is done in this manner because credit bureaus often will not deal with a credit repair company, therefore this method makes it appear that the mailings originate from the customer's postal address. This process includes an automatic resort to debt negotiations if the disputed amount is within a certain dollar amount range and the member has pre-approved of such a procedure.

FIG. 12 illustrates the debt negotiation process. The process begins 900 by attempting to repair a member's 510 credit through the credit profile maintenance process 58. A particular negative entry is given three or four removal attempts 902 through the credit profile maintenance process 58. If a particular negative entry is not removed in a final attempt 904, then debt negotiation is recommended 906 to the member 510 through the individualized information account, FIG. 4, or other communications means such as telephone, facsimile, e- mail, mail or other channel. In order to qualify for the debt negotiation process, the amount in controversy must be between $200 and $5000 908, otherwise no debt negotiation is possible and the process ends 950. To commence the debt negotiation process, a member 510 selects 928 the particular debt that is to be negotiated. If the member 510 is qualified and interested 910, the member 510 must decide on an amount to offer 912 in order to settle the debt. If the amount is reasonable 914, depending on a number of factors, such as the creditor, the amount in controversy and the type of debt, the offer is made 916 to the creditor. If the amount is determined to be unreasonable then the process reverts back to the member 510 deciding on an amount to offer 912 in order to settle the debt. The offer is then accepted or declined 918 by the creditor. If the offer is rejected the process reverts back to the member 510' deciding on an amount to offer 912 in order to settle the debt. If the offer is accepted, a fee is taken 920 as a percentage of the debt written off or as a flat fee. The guaranty letter is retained from the creditor 922 and the funds are removed 924 from the member's account and sent to the creditor. The member's 510 new status is then reported 926 to the credit agencies.

Referring now to FIG. 4, is a representative schematic of the individualized information account. In a preferred embodiment, the individually tailored information account actively notifies 108 the member of any activity in the member's account. This push notification and other various information conveyance could be achieved through the use of an icon on the member's computer desktop, which activates upon successfully logging in to the system. Members can access this account by logging 110 on to a secure website with a user name and password. After a successful logon 110, an individualized webpage will appear 112 on the customer's computer terminal output device. Features that are accessible on the individualized webpage are: credit score(s) 114, where the customer can see a monthly update 116 of the individual's FICO score and/or FICO related scores and/or an international credit scoring system (ICSS) or other credit scores; Identity Theft Notification activity 119; Credit Reports 118, where the member can see a scanned image of the member's credit reports 120 and where the member can view: debt negotiation 121, credit maintenance 123 status and deleted accounts and corrected information 122; Billing 124, where the member can see 126 up to date records of the billing status on the member's account; Update 128, where the member can update 130 records in the database 46; and Upgrade 132, where the member can add a spouse to the account or upgrade a level of membership 134. Customer service representatives and professionals in the financial service fields will also be on hand to answer financial management and planning questions 136 through the individualized information account. In addition, the individualized information account would notify members of current approvals 138 for every credit facility offered by the invention, provided the members profile from the database 46 allows for a pre-qualification through actual approval. The individualized information account also has the capability to include an activity log 140 that shows the member, item by item, the activity that has taken place pertaining to the member's account (e.g. a payment received).

FIG. 5 illustrates how the system performs periodic analysis of a member's account to determine approvals with various financial institutions for any number of credit facilities. The system begins its periodic process 142 of scanning 144 the member database 46 for a member participating in the pre-qualification program. A member is either found or nc⁺ found 146 to be participating in the pre- qualification program. If a member is not found 148 the process is terminated. If a member is found 150, the member's profile from the database 46 is compared 150 to the lender qualifications 152 stored by the database 46. The comparison 150 uses member financial information provided by the member 154, calculated FICO scores 156, and/or FICO related scores and/or any supplemental calculated score(s) 158. Members are notified through electionic mail 164, the individually tailored information account 165, telephone 166 and mailed correspondence 167. The loan process is then finalized 168 (see also FIG. 6). This is generally more than just pre-approvals, because of the detailed information the system retains on each member, actual approval templates from banks are used to determine actual approvals, perhaps pending various items such as wage and equity verification. Looking at FIG. 6, the loan finalization process is initiated in possibly two ways. The member can initiate 180 a request for a loan, or the proactive pre-qualification process FIG. 5 can indicate 182 to the member which loans are available to the member. The member then reviews 184 the list of loans for which he/she qualifies. A choice 186 is then made by the member to pursue 190 or not to pursue 188 a loan. If the member does not pursue 188 a loan, then the process ends there. If the member does decide to apply for a loan 190, then additional information is obtained as required by the type of loan sought. The system then scans 192 for lenders that will accept a loan application based upon the information provided by the member. Once all lenders have accepted or rejected the application, the member chooses 194 among the acceptances the desired lending institution. If the member decides not to choose a lender 196, then no action is taken and no credit check is done. If the member chooses a lender then the lender is notified and the member's information is forwarded 198 to the lender for processing electronically, the lender may or may not choose to have sent to them the ciedit reports on file in the database 46. This concludes the loan finalization process 200.

The credit facility approval analysis is represented by FIG. 7. Members, from time to time, will review their database information 46 for accuracy 210. Whenever the member finds information outdated or incorrect, it is expected from the member that corrections 212 will be made. New and correct information is stored in the member database 46. With the member's information, the system will automatically compare 214 the information against qualification criteria for financial service institutions. The member is then notified 216 when they qualify for lender programs, such as auto loans 14. Once educated as to the services available, the member then chooses 218 the services that best meet the member's needs. The member may need a mortgage 12 for example, but not a student loan 16. If a lender requires additional information 220, the system will prompt the member to add it to the database 46. The system then provides 222 the member a list of the lenders that are offering the service desired. The member makes a choice 224 of lenders, and the qualifying information and credit score are forwarded 226 to the chosen lender.

FIG. 8 illustrates the e-business partnership program. A customer goes to a car dealership for example, and applies for financing in order to make the automobile purchase. If the customer is denied credit 240, the dealership refers the customer to the registration process 2, if the customer is not already a member. This customer receives a reference number regardless of whether he/she is already a member 242. Assuming the denied customer becomes a member, the customer then enters this reference number into the member database 46. This reference number serves as an authorization for the dealership to access the member's information, through the Extranet depicted in FIG. 13, for the purposes of monitoring 246 the improvement in the member's credit file. Once the dealer has determined that a member's credit is at a qualifying level, the dealer then uses 248 it own marketing devices to entice the customer into reapplying for financing. This arrangement could be used for any type of business that would deny credit to a potential customer based upon certain qualifying factors. FIG. 13 illustrates the operation of the extranet according to the preferred embodiment of the invention. The member 510 accesses the individual account information source 760 through the Internet 550. Among other things, this individualized account information source 760 provides: the current credit score 116 of the member 510; loan status updates for any loans already applied for or issued 138; and the qualification status 184 of the member 510 for pre-approved loans provided by the analysis engine 705. Specific terms 1000 of pre- approved loans 184 are displayed to the member 510. In addition, the member 510 can utilize the mortgage payment calculator 1002, shown in FIG. 14, to optimize various terms offered by the pre-approved loans. In some cases, the lender 520 may be offering a special rate or a promotion 830 to the member 510. Once the member 510 has selected a particular loan, additional information must be supplied 190 to the lending institution in order for application processing to be completed. The lender 520 accesses all information from the extranet gateway 800 through the Internet 550. The lender 520 also inputs information into the system 500, such as lender specials and promotions 830 and lender program information 1004, through the extranet gateway 800. Various factors of the international credit scoring system (ICSS) are represented in FIG. 9. After registration 2, information should be available to calculate the ICSS score 258. Factors such as credit ratings from foreign countries 260, cash assets 262, other assets 264, employment status 266, reason for stay? 268, income 270, brokerage accounts 272, home equity 274 and long term securities and deposits 276 are used for the tabulation of the score 258.

Referring next to FIG. 10, different types of negative history can be deleted by the credit bureaus. For example: late payments 300 can be disputed 4; collection accounts 302 can be disputed 4 and negotiated 6; judgments 304 can be disputed 4 and negotiated 6; tax liens 306 can be disputed 4 and negotiated 6; bankruptcies 308 can be disputed 4; and inquiries 310 can be disputed 4.

Turning next to FIG. 11, in a preferred embodiment of the financial planning and management system 500 of the present invention, the system includes an Intranet 600 for internal processing of consumers or members 510, an Extranet 800 for dealing directly with lenders or creditors 520 and businesses offering wares or services involving financial applications 530, and a central database 46 for maintaining information related to all parties which have the opportunity to access the system 500 of the present invention through a global communications network 550.

The Intranet 600 of the system 500 incorporates the functions of marketing to potential new customers 516 and enrolling such new customers 515. A consumer 510 registers with the system 500 while connected to a global communications network 550 or alternatively while engaged in a voice communication session with a customer service representative. The consumer's membership fee is paid via credit card, which charges are verified 516 over a global communications network 550. If a new member 510 does not have an existing credit card, banks affiliated with the system 500 are available to issue secured credit cards 518 to new members, which issuance of new cards helps the new members establish and/or improve their credit scores. Once enrollment is completed, the system 500 automatically welcomes consumers 510 via electronic mail and provides basic information about the service provided by the system and method for financial management and planning. A parcel of individualized, introductory information is then prepared and mailed to the consumer, including a power of attorney authorizing the system to act on the consumer's behalf with the credit bureaus. Because of the intricacies currently involved in the acquisition of credit reports from the bureaus, the consumer obtains an official copy of his credit report from one of the bureaus and transmits it to the system. Once the credit report is received and processed within the system 620, the system takes the steps necessary to eliminate negative and/or erroneous references from the member's credit report, see FIG. 3. Information about the consumer is gathered from not only the enrollment process, but also from any possible referral of the consumer. The important static information is retrieved at various points of activity within the system 500 and primarily at the point of registration. This information is compiled, stored and associated with the individual consumer in the system's central database 46, with information specifically associated with credit applications stored in an approval analysis database 705. Once the member's credit history is within the databases 46, 705, the system puts into place a process by which it updates the member's credit history on a periodic basis, preferably every 15 to 30 days 519, in order that the member is in position to qualify for additional credit facilities from participating lenders and businesses as his credit scores improve.

A member 510 will not have to input the basic personal and financial information more than once, saving time and aggravation for the consumer. Und *r the system 500 of the present invention, this information may be retrieved and utilized whenever the member 510 wishes to apply for credit 710 or when participating lenders or businesses wish to proactively seek out qualified members, as more fully detailed in FIGS. 5 and 6. As the system processes the applications using the members' financial information and the lenders' and/or businesses' qualification information, again as detailed in FIGS. 5 and 6, the system 500 passes the decisions on to the member via a personalized messaging system that will notify the member of new decisions on a periodic basis 760 or at least as often as every time the member logs onto the system 770.

The Extranet 800 of the system 500 enables participating lenders and businesses to re-contact those members who previously failed to qualify for credit with them in order to offer them credit when the members' credit scores improve adequately. Using the Extranet 800, the lenders and businesses are able to identify those members to whom they can market credit facilities due to improved credit scores 830. Additionally, participating lenders and businesses can also compile a set of qualifications under which members will automatically be approved for credit facilities and can store these qualifications, via the Extranet, in a Database Approval Template 810 of the system. The system will provide a combination of pre- configured Database Approval Templates 810 and lender/business custom tailored templates. These pre-approval criteria are utilized by the system to proactively notify qualified members that they can obtain credit 820 and are also used when members seek credit and the system matches the member's needs with the credit approval qualifications of its participating lenders and businesses, as discussed above and shown in FIGS. 5 and 6.

Via the Extranet 800, members can also receive information such as financial news, financial planning advice, and the like 840, which information is provided to members based on criteria established by the members or as selected by members during any particular session on the system.

We turn now to FIG. 12, a diagram supplemental to FIG. 3, further illustrating the credit maintenance and repair process. The credit reports are received 900 by the system 500. The reports are then scanned 902 into the system 500 and shredded 902 for member confidentiality. The scanned reports are then analyzed 904 for negatives or aberrations on the credit reports. Certain negatives will be referred to the dispute 910 mechanism. Others will proceed to the debt negotiation 920 mechanism. The dispute mechanism is used to correct inaccuracies 912, whereas the debt negotiation is used to reduce 922 outstanding amounts due or to convince creditors to write off 922 the debt completely. The negatives are disputed with the credit bureaus 914 and any items deemed as inaccurate by this process are deleted 916 from the member's credit report. Under the debt negotiation process, credit can be improved by making a settlement 924 with the creditor, for which a payment program 926 would be established. By completing payment, or if the creditor writes off the debt completely, the member debt can be deleted 928 from the credit report. The member's profile is then accurate and updated once the deletions have been recorded by the credit bureaus. Once the member has an improved credit score, the member can begin to re-establish credit 932. This can be accomplished by various opportunities, for example a computer offer 934 or credit card offer 936, presented by the system 500 and its business partners 938.

Accordingly, it will be understood that the preferred embodiment of the present invention has been disclosed by way of example and that other modifications and alterations may occur to those skilled in the art without departing from the scope and spirit of the appended claims.

Claims

What is claimed is:

1. A method for restoring and maintaining a person's credit score, comprising the steps of: receiving said person's credit information; analyzing said credit information so as to determine any negative entries thereupon; processing said negative entries in an effort to remove said negative entries from said credit information; receiving revised credit information based on said processing of said. negative entries; analyzing said revised credit information so as to determine any remaining negative entries thereupon; and continuing to process said negative entries until all of said negative en^tries are removed from said credit information.

2. The method of Claim 1, wherein the step of receiving said person's credit information comprises the steps of: receiving said person's financial and personal information; ordering said person's credit history on behalf of said person, using said financial and personal information, from at least one credit bureau; and entering said credit history order in an information database.

3. The method of Claim 1, wherein said step of processing said negative entries comprises the steps of: transmitting to said credit bureau details of said negative entries on behalf of said person; setting said transmission for follow up with said person; and setting said transmission for follow up with said credit bureau on behalf o said person.