What makes a credit card holder DEFAULT?
Credit card defaults are rising, creating major risks for financial institutions and their revenue stability. This analysis explores the key factors behind default behaviour and identifies the strongest predictors using data-driven insights.
The Taiwanese Financial Institution, or TFI, is a credit card provider. It has noticed an increase in client defaults. This situation is having a significant negative impact on the company’s revenue. Still, they are aware that they can take action if they can foresee which credit card customers would miss their subsequent payment. However, the management of TFI has emphasised that understanding why consumers are defaulting is as crucial to them as predicting which customers would do so. Hence, the purpose behind this project includes answering the following questions:
How does the probability of default payment vary by categories of different demographic variables?
What age group do people with high lines of credit belong to?
Which variables are the strongest predictors of default payment?
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