Credit Scoring - Case study in data analytics

Credit Scoring - Case study in data analytics

1. Advent of Data Analytics

   • Data transforms bsiness and drive creation of business value.
     • Distributed fie systems
       • Database Management
         • Advanced analytics
           • Case Study

2. Credit Scoring

   • Tool used in decision makng process of accepting or rejecting a loan.
   • Health score
     • New clients
       • What drives default

3. Data Quality

   • Preprocessing and checking the quality data
     • Proportion of defaults in data
       • Frecuency of values in each variable in the data
         • Proportion of outliers in the data
           • Quality Assurance
             • Missing values are there and what is the reason

4. Model Development

   • Defaullt defination
     • Classification
       • Reject inference
         • Logistic regression
           • Training versus generalisation error
         • Variable selection
           • Information value

5. Model Performance

   • Goodness of Fit
     • Predictive Power
       • Confusion Matrix
   • Find coefficients that lead to a model that has two main properties
     • 1. it fits the existing data
       • 2. it can produce the correct probability of default on data that it has not seen before
         • Teresa del Bosque
           • 524697
             • Doy mi palabra que he realizado esta actividad con integridad academica

6. Model Refinements

   • Number of assumptions the logistic regression model
     • Linearity in the explanatory variables
       • Absence of interactions among explonatory variables

7. Model Interpretation

   • Transparency in the interpretation of the model

8. Deloitte. (2016). Credit Scoring