Default Prediction Systems

Default prediction systems are tools used by financial institutions to estimate the likelihood that a borrower will fail to repay a loan or meet their financial obligations. These systems analyze various data points—such as credit history, income, debt levels, and economic conditions—to assess risk. By predicting the chance of default, lenders can make more informed decisions about approving loans, setting interest rates, and managing their portfolios. Essentially, they help identify potential credit risks early, enabling better risk management and protecting financial stability.