1. Learning Predictive Modeling with Data from Lending Club
Decision Sciences Institute Annual Meeting
November 2017
Paul Brooks,

2. VCU Master of Decision Analytics
Classes every other weekend
Friday 12:00 PM to 8:00 PM
Saturday 8:00 AM to 3:30 PM
Duration
16 months of classes
20 months to degree

3. Practicum Master of Decision Analytics Data Management Software
Fall 2018 Foundation
Spring 2019 Foundation
Fall 2019 Foundation
Spring 2020 Foundation
Business Intelligence
Data Mining
Python
Data
Management Software
Database Design
Advanced SQL
Tableau
Emerging Technologies
Text Mining
Statistics II R
Risk Analysis
Forecasting
Customer Analytics
Simulation
Optimization Models
Statistics
Statistics I
Practicum
Guest Speakers Workshops
Analytics Cases
Guest Speakers Workshops
Analytics Cases
Guest Speakers
Problem Formation
Practicum Intro
Applications
Interpersonal Communications
High Performance Teams
Presentation Skills
Leadership Models
Accountability
Managing Conflict
Presentation Skills
Problem Solving
Influencing Skills
Diversity
Virtual Teams
Written Comm.
Leadership

4. Lending Club

5. Assignment 1: Read Data
Download data from one year, import into a data mining software, and describe modifications needed.

6. Know Thy Data SAS Instructor
Lesson 1
Know Thy Data SAS Instructor

7. Lesson 2
Be prepared when the info management department asks how you want data stored. Better yet, be proactive.
LoanStatNew
Description
acc_now_delinq
The number of accounts on which the borrower is now delinquent.
acc_open_past_24mths
Number of trades opened in past 24 months.
addr_state
The state provided by the borrower in the loan application
all_util
Balance to credit limit on all trades
annual_inc
The self-reported annual income provided by the borrower during registration.
annual_inc_joint
The combined self-reported annual income provided by the co-borrowers during registration
application_type
Indicates whether the loan is an individual application or a joint application with two co-borrowers

8. Assignment 2: Predictive Modeling Plan
Write a 1/2-1 page plan to develop a predictive classification model that would support decision making at Lending Club.
Would you use data on rejected applications or just historical data on approved loans?
What business decision would your model support?

9. Lesson 3
The first response in any task for knowledge discovery through data mining is …

10. Lesson 3
The first response in any task for knowledge discovery through data mining is …
You collected the wrong data.
Here is the data you need:

11. Lesson 4
The second response in any task for knowledge discovery through data mining is …
But here is what we did find…

12. Assignment 3: Predictive Model Implementation
Create classification models using two different methods and compare their performance based on the confusion matrix for the validation data.
Describe all preprocessing steps and provide an interpretation of the performance comparison.
Refer to your proposed plan from the previous assignment and include aspects of it to provide context to your work and/or include an updated plan.

13. Lesson 5
When building a predictive model, be careful to use data that would be available at the time of prediction.
Loan Status
Charged Off
Default
Current
Late (16-30 days)
Late ( days)
Fully Paid
In Grace Period
total_pymnt
Payments received to date for total amount funded
total_pymnt_inv
Payments received to date for portion of total amount funded by investors
total_rec_int
Interest received to date
total_rec_late_fee
Late fees received to date
total_rec_prncp
Principal received to date

14. Communicate with information management. Conduct an experiment.
Lessons
When building a predictive model, be careful to use data that would be available at the time of prediction.
Know Thy Data.
Communicate with information management.
Conduct an experiment.
Find some interesting patterns anyway.
Be wary of the time of prediction.