Nova Bank Credit Risk Analysis

Clarisse S.

186

Hire Verified Talent

Find data professionals with skills verified through real challenge performance.

Browse Talent Directory

Generate Custom Datasets

Create realistic synthetic data for training, testing, and demonstrations.

Explore Dataset Generator

Other Portfolio Images

Trends identified based on default loans data: Loan Affordability: Defaults strongly linked to high loan-to-income ratios (correlation = 0.52). Borrowers allocating >30% of income to loan payments show sharp risk increases. Loan Structure: High risk of defaulting is at 6% - 16% interest rates along with the length of loan which are all risky at 36-month to 60-months. This means the longer the payment term, combined with the high interest gives real risk exposure. Borrower Profile: Credit Grade D borrowers dominate defaults. Loan Purpose: Medical and Debt Consolidation (which are mostly in Grade D) loans carry the largest default exposure. Recommended Actions: Tighten Affordability Limits → Cap loan payments at ≤30% of income. Reprice or Restrict High-Risk Segments → 36-month terms, 6–16% interest loans, and Grade D borrowers. Strengthen Underwriting → Give heavier weight to credit history. Manage Loan Intent Risk → Reduce exposure to Medical and Debt Consolidation loans. Portfolio Rebalancing → Shift approvals toward Grades A–C to stabilize default rates.