Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Pick a variable that you believe will be an important explanatory variable for loan defaults and explain why. loan_amnt The listed amount of the loan
Pick a variable that you believe will be an important explanatory variable for loan defaults and explain why.
loan_amnt | The listed amount of the loan applied for by the borrower in thousands. |
loan_term | Length of term for the loan in years. |
int_rate | Interest Rate on the loan. |
fico | The borrower's FICO score. |
dti | A ratio calculated using the borrowers total monthly debt payments on the total debt obligations, excluding mortgage and the requested loan, divided by the borrowers self-reported monthly income. |
annual_income | The borrower's annual income in thousands. |
income_verification | Indicator variable 1 if borrower's reported income has been verified by lender. |
home_mortgage | Indicator variable 1 if borrower has mortgage on their home, else 0. |
home_own | Indicator variable 1 if borrower has owns their home, else 0. |
home_rent | Indicator variable 1 if borrower rent their home, else 0. |
debt_consolidation | Indicator variable 1 if the borrower's stated purpose for the loan is debt consolidation. |
coborrower | Indicator variable 1 if the loan has a coborrower. |
num_accounts | The number of open credit lines in the borrower's credit file. |
revol_bal | The borrower's total credit revolving balance. |
revol_util | Revolving line utilization rate, or the amount of credit the borrower is using relative to all available revolving credit. |
derogatory_records | Indicator variable 1 if the borrower's has derogatory marks in their public record. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started