• The table on the left shows all variables that

Consumer behaviour of customers who differed by at least 10% for those who charged off

fully paid back loan vs customers who and those who fully paid. This suggests these
categories are clear consumer differences between

charged off
The mean annual Average current
Maximum current balance owed on
The mean Number all revolving accounts (a revolving
those who fully paid back their loans and those who
charged off.
income provided by
the borrower during
The mean balance of all current
Interest Rate on credit lending
of credit inquiries account is a credit card or overdraft Months since most
(searches) in past where the balance can fluctuate recent revolving
Months since most Number of
recent account mortgage
Number of accounts 90 Number of
or more days past due in public record • The ones in red I have not considered reliable due to the
Loan Status registration. the loan products / accounts 12 months month on month) account opened opened accounts. last 12 months bankruptcies
CHARGED OFF £73,451.59 16.15% 10698.98 2.57 5161.05 11.40 6.87 1.31 2.56 0.17 fact they have more than 5% of data missing. Also we
FULLY PAID £81,997.86 13.23% 14220.32 2.22 5894.01 13.54 8.04 1.71 2.20 0.13 cannot infer from the missing data for these specific
variables that it may considered useful.
The mean ann ual in come p rovid ed b y Average current balance of all
t h e b o r r o w e r d u r i n g r e g i s t r a ti o n . current credit lending products / • The 4 graphs on the left show some of the most
£84,000.00
accounts critical differences between those who fully pay
£82,000.00
£81,997.86 £16,000.00 back their loan and those who do not.
£14,220.32
£14,000.00 • The data shows that:
£80,000.00
10.4% £12,000.00 £10,698.98 • Lower income leads to greater chance of
£78,000.00 32.9%
£10,000.00 charge off
£76,000.00
£8,000.00 • Lower average current balance leads to
£74,000.00 £73,451.59
£6,000.00 greater chance of charge off
£72,000.00 £4,000.00 • Greater no. of bankruptcies leads to
£70,000.00 £2,000.00 greater chance of charge off
£68,000.00
FULLY PAID CHARGED OFF
£0.00
CHARGED OFF FULLY PAID
• Higher interest rate on the loan leads to
greater chance of charge off
Nu mb er of p ub lic record ban krup tcies Th e mean In t er est Rat e o n t h e lo an
Customer who fully paid on
0.18 0.17 18.00%
16.15% average had a mortgage
0.16 16.00%
0.13
whereas those who did not
0.14 14.00% 13.23%
30.8% 22.1% were on average renting.
0.12 12.00%
0.10 10.00%
0.08 8.00% Conclusion:
0.06 6.00%
Lloyd bank group should be more strict in their
0.04 4.00%
loaning out strategy. They should observe the
0.02 2.00%
historical data on potential loanees and compare it to
previously charged off customers. If the results are
0.00 0.00%
FULLY PAID CHARGED OFF FULLY PAID CHARGED OFF similar they should not give out loans to the customer
or drastically limit the amount able to be loaned.