High Credit Line Usage Linked to Increased Default Risk for Bank Borrowers
The article examines how the use of credit lines and checking account activity can predict the likelihood of borrowers defaulting on their bank loans. The researchers found that borrowers who use a higher percentage of their credit lines and have more frequent checking account transactions are more likely to default on their loans. This suggests that monitoring credit line usage and checking account activity can help banks assess the default risk of their borrowers.