Can credit ratings predict defaults in peer-to-peer online lending? Evidence from a Chinese platform

•This study focuses on whether the credit ratings of new borrowers on a Chinese peer-to-peer (P2P) online lending platform can predict their default.•The credit ratings of new borrowers do not accurately predict their probability of default.•The default probability of new borrowers is much higher than the average default probability on the entire platform.•The high probability of default by new borrowers explains why more than 86% of P2P lending platforms in China encounter operational difficulties.