Credit – Card Securitization Audit Reports

In the late 1980’s banks were looking for ways to fund credit cards. This resulted in the process of securitization which is the pooling of cash flows from debts and then selling them to third parties in form of securities. Credit card backed securities are split into the revolving and amortization periods. First the cash flow from the credit cards is put into a trust structure and then distributed to the investor and seller interest.

The audit is done to evaluate the effectiveness of the credit service providers’ fraud protection process. This is done by reviewing reports that include the credit card securitization process. The process of securitizing a credit card is almost similar to that of securitizing any other loan. This leads to the development of more banks that specialize in issuance of credit cards as it provides a source of funding and risk transfer.

In credit card securitization, the party that is issuing the card sells accounts to a trust. This trust then issues securities that are backed by receivables. The issuer still services the account but the   only difference is that the assets are not in their balance sheets. This will allow the credit card issuer to reduce their capital requirements, and also reduce the risks should the borrower fail to pay.

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The audit is often done to determine the lenders credit card debt balances compared to the credit bureaus along with the borrowers’ activities. The report shows the borrower’s credit score as each individual credit is tracked based on trade lines.

The credit card securitization audit report contains detailed information about the credit card securitization process. The reports are derived from an audit process that is conducted by an auditor to identify fraudulent activities that may occur in the credit card securitization process. For free consultation please go to

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