I have monthly data of loan installment repayment. The data contains basic features like salary, age, gender, credit score, etc. Along with the above features, I have the data for the last 6 installment failure/success. Now based on this, I want to predict which customers are going to default next month.

The problem I would like to highlight, to apply any machine learning algorithm, I need labels for the same month, i.e., for Feb 20 predictions, I need some rows with labels success/failure in Feb 20 (so that I can train model on this) and then can predict on the remainder of data from Feb 20.

But here I don't have any labels for Feb 20 (I have data for past failures instead).


1 Answer 1


This is a common problem. In a perfect world, training data is perfectly representative of the data that will need to be predicted. However, we don't live in a perfect world and we need to work with approximations. You don't have data about Feb-20 but you have data about Jan-20, Dec-19, etc. You can still use this data! Nothing is stopping you.

  • $\begingroup$ If i use Jan20 or Dec-19 then essentially i will be doing prediction for Jan20 by putting the failure/success from Jan only.. which is not right. $\endgroup$
    – SKB
    Commented Jan 28, 2020 at 13:08
  • $\begingroup$ No, you'll learn from Jan20, Dec19 and you will use what you learned to make predictions about Feb20, Mar20, etc. What are your input features? $\endgroup$ Commented Jan 28, 2020 at 13:15
  • $\begingroup$ That is what I want to understand how to use historical results to predict future(specifically I don't have any data for next month to train the model). If I train the model on Jan 20 data then prediction also can be done on jan data. The data contains basic features like salary,age,gender, credit score etc. Also last 6Months pass/fail of installment. $\endgroup$
    – SKB
    Commented Jan 29, 2020 at 3:20

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