Method and apparatus for rating asset-backed securities

An apparatus for managing asset-backed securities (ABS) based on loans to borrowers, comprising:

• a processor;
• and
• a memory in communication with the processor, wherein the memory stores a plurality of processing instructions for directing the processor to:
• model consumer spending patterns using individual and aggregate consumer data, including tradeline data, internal customer data, and consumer spend panel data;
• estimate a spend capacity of each borrower of a loan based on tradeline data of the borrower, balance transfers of the borrower, and the model of consumer spending patterns;
• for each borrower, use the spend capacity as a factor in determining loan amounts to reduce a risk of default;
• and
• output the reduced risk of default, wherein the output is used to obtain an ABS rating.

A computer program product for managing asset-backed securities (ABS) based on loans to borrowers, said computer program product having computer program code embodied in computer-readable medium, said computer program code comprising:

• first computer readable program code which causes a computer to model consumer spending patterns using individual and aggregate consumer data, including tradeline data, internal customer data, and consumer panel data;
• second computer readable program code which causes a computer to estimate a spend capacity of each borrower of a loan based on tradeline data of the borrower, balance transfers of the borrower, and the model of consumer spending patterns;
• third computer readable program code which causes a computer to use the spend capacity as a factor in determining loans for which the risk of default is reduced;
• and
• fourth computer readable program code which causes a computer to output the reduced risk of default, wherein the output is used to obtain an ABS rating.