Future behavior isn’t entirely predictable by past behavior. Sure. External events might put a particular individual in arrears, even though she/he has never de

Future behavior isn’t entirely predictable by past behavior. Sure. External events might put a particular individual in arrears, even though she/he has never defaulted in her/his life. Machine learning however, can use past behavior to make an educated guess, regarding how/when/if an individual will repay and/or how vulnerable said individual is to unforeseen external events. Machine learning might not be able to go as deep as evaluating someone’s chances of getting hit by lightning, for the purposes of credit ratings. However it does figure out if an individual has the chance to get out of sticky situations. Summarizing, it’s not about predicting irrational behavior. It’s about using past behavior to make a better educated guess than was possible before.