Customer financial profile

Annual income (w=10%)

$75K

Employment years (w=12%)

5 yr

Payment history (w=25%)

80%

Debt-to-income ratio (w=28%)

35%

Credit utilization (w=18%)

40%

Missed payments (12mo) (w=7%)

Weights from entropy-based method (paper §2). DTI carries highest weight — most informative indicator of default. Weights sum to 100%.

Boltzmann probability assessment

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P(default) — Boltzmann probability

Energy (E)

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Rating

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State

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E = Σ w×r = —

P = sigmoid(β×(E−E&sub0;)) = sigmoid(6×(E−0.60))

P = —

Risk factor energy contribution

Each bar = w×r for that factor. Taller bar = bigger pull toward default.

Boltzmann state transition (paper §2)

Current state

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Upgrade threshold

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Downgrade threshold

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Boltzmann probability-based customer default prediction engine — interactive credit assessment tool based on entropy-weighted financial indicators