Research On The Credit Scoring Model Of Internet Consumer Loans Considering Different Borrowing Methods

Credit risk is the main risk faced by the Internet consumer credit industry.Borrowers’ default will damage the interests of the platform,and the ever-increasing loss of bad debts will threaten the sustainable operation of the platform.The fundamental source of credit risk is the information asymmetry between the lending platform and the borrower.For the traditional offline personal credit industry,the introduction of joint liability loans is an important strategy,which has the potential to alleviate information asymmetry.In recent years,in addition to the common singleperson borrowing model,the co-borrowing model with joint liabilities has been gradually applied to the online personal credit industry.Research on the joint liability model is often found in the offline credit market,while there is less research on the online joint liability loan under the background of big data.Lending Club is currently the largest Internet lending platform in the United States,providing single-person borrowing and co-borrowing models for individual consumer credit demanders.The single-person borrowing model is suitable for borrowers with higher credit levels,while the co-borrowing model is suitable for borrowers who need loans but whose credit level does not meet the requirements.This article uses the real credit data of the Lending Club platform to establish different credit scoring models based on Logistic regression,and analyzes the differences between the two borrowing models and the significance of introducing a new online joint liability model.The results show that,compared with the single-person borrowing model,the credit levels of the primary borrower and the second borrower under the co-borrowing model jointly affect the possibility of loan default.In addition,the difference of the average default rate between the online co-borrowing model and the single-person borrowing model is very small,indicating that the applying of online joint liability loans cannot significantly reduce the default rate.But it does have positive significance in solving the problem of more funding needs and increasing the business of the platform.Finally,this article evaluates the overall credit level of different borrowers by calculating the proportion of defaults in different credit score ranges under the two borrowing modes and then put forward recommendations on the credit strategy in terms of credit approval,borrowing amount,borrowing interest rate,and repayment cycle.