Since the 1990s, there have been significant advances in the technology space and the e-Commerce area, leading to an exponential increase in demand for cashless payment solutions. This has led to increased demand for credit cards, bringing along with it the possibility of higher credit defaults and hence higher delinquency rates, over a period of time. The purpose of this research paper is to build a contemporary credit scoring model to forecast credit defaults for unsecured lending (credit cards), by employing machine learning techniques. As much of the customer payments data available to lenders, for forecasting Credit defaults, is imbalanced (skewed), on account of a limited subset of default instances, this poses a challenge for predictive modelling. In this research, this challenge is addressed by deploying Synthetic Minority Oversampling Technique (SMOTE), a proven technique to iron out such imbalances, from a given dataset. On running the research dataset through seven different machine learning models, the results indicate that the Light Gradient Boosting Machine (LGBM) Classifier model outperforms the other six classification techniques. Thus, our research indicates that the LGBM classifier model is better equipped to deliver higher learning speeds, better efficiencies and manage larger data volumes. We expect that deployment of this model will enable better and timely prediction of credit defaults for decision-makers in commercial lending institutions and banks.
Unifund CCR, LLC（Unifund CCR有限责任公司）；Pamplin College of Business, Virginia Polytechnic Institute（弗吉尼亚理工学院庞普林商学院）；College of Business, University of Cincinnati（辛辛那提大学商学院）
Enabling Machine Learning Algorithms for Credit Scoring -- Explainable Artificial Intelligence (XAI) methods for clear understanding complex predictive models
Warsaw University of Technology（华沙理工大学）；University of Warsaw（华沙大学）；Data Juice Lab sp. z o.o.（Data Juice Lab 有限责任公司）；Polish Credit Bureau S. A. (Biuro Informacji Kredytowej S.A.)（波兰信贷局）
Enhancing ML Models Interpretability for Credit Scoring
Dept. of Computer Science, Delft University of Technology（代尔夫特理工大学计算机科学系）；Dept. of Applied Mathematics, Delft University of Technology（代尔夫特理工大学应用数学系）；FF Quant Advisory B.V.（FF量化咨询公司）
