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    Spotle - Ai Data Science Final Capstone Project Building An Credit Card Analyser Using Decision Tree Classifier

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    Mohd Shazib Ur Rahman
    This document summarizes a capstone project to build a credit card risk analyzer using a decision tree classifier. It discusses what credit analysis and risk evaluation are, why decision trees were used as the model, and the methodology, data, and techniques employed. The model was trained on a dataset containing 13 variables for previous credit card holders to predict whether they would be defaulters. Accuracy scores of 81% for entropy and 80% for gini criteria are reported.

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    Spotle - Ai Data Science Final Capstone Project Building An Credit Card Analyser Using Decision Tree Classifier

    Uploaded by

    Mohd Shazib Ur Rahman
    24 views4 pages
    This document summarizes a capstone project to build a credit card risk analyzer using a decision tree classifier. It discusses what credit analysis and risk evaluation are, why decision trees were used as the model, and the methodology, data, and techniques employed. The model was trained on a dataset containing 13 variables for previous credit card holders to predict whether they would be defaulters. Accuracy scores of 81% for entropy and 80% for gini criteria are reported.

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    This document summarizes a capstone project to build a credit card risk analyzer using a decision tree classifier. It discusses what credit analysis and risk evaluation are, why decision trees were used as the model, and the methodology, data, and techniques employed. The model was trained on a dataset containing 13 variables for previous credit card holders to predict whether they would be defaulters. Accuracy scores of 81% for entropy and 80% for gini criteria are reported.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    24 views4 pages

    Spotle - Ai Data Science Final Capstone Project Building An Credit Card Analyser Using Decision Tree Classifier

    Uploaded by

    Mohd Shazib Ur Rahman
    This document summarizes a capstone project to build a credit card risk analyzer using a decision tree classifier. It discusses what credit analysis and risk evaluation are, why decision trees were used as the model, and the methodology, data, and techniques employed. The model was trained on a dataset containing 13 variables for previous credit card holders to predict whether they would be defaulters. Accuracy scores of 81% for entropy and 80% for gini criteria are reported.

    Copyright:

    © All Rights Reserved
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    of 4

    Spotle.

    ai data science final


    CAPSTONE PROJECT

    Building an credit card


    analyser using Decision
    Tree classifier

    BY :
    shazib rahman
    objective:
    To build a custom Credit Risk Analyzer, using a decision tree model, which will predict the
    suspected credit card defaulters among the new applicants.

    WHAT IS CREDIT ANALYSIS ?

    Credit analysis is a type of analysis an investor or bond


    portfolio manager performs on companies or other debt issuing
    entities to measure the entity's ability to meet its debt
    obligations. The credit analysis seeks to identify the
    appropriate level of default risk associated with investing
    in that particular entity.

    Why credit card risk evaluation ?


    Recently, with the financial crisis becoming serious, the
    trend of financial globalization and financial market
    volatility has attracted people’s attention, especially banks
    and investors who suffered unprecedented challenges of credit
    risk. The credit crisis caused by American showed that
    international banking has been challenged because of their
    lack of effective methods for assessment in controlling
    credit risk.

    Why decision tree ?

    Decision tree is used to develop credit risk analyzer. This


    model suits us based on the data format we have on previous
    credit card holders.
    METHODOLOGY USED

    As i already have written before we are using


    decision tree for this dataset but the random
    forest can also be used because it is based on
    decision tree itself and now the question is what
    is decision tree
    well,Decision Trees (DTs) are a non-parametric
    supervised learning method used for classification and
    regression. The goal is to create a model that predicts
    the value of a target variable by learning simple
    decision rules inferred from the data features. For
    instance, in the example below, decision trees learn from
    data to approximate a sine curve with a set of if-then-
    else decision rules. The deeper the tree, the more
    complex the decision rules and the fitter the model.

    So,we are using sklearn package which has already


    Decision tree algorithm.

    DATA:
    Now if we talk about the dataset given it consist 13
    columns and 12 columns are independent variable and the
    last one is dependent variable and the last variable will
    tell us whether the card user is defaulter or not.
    In the above picture you can see the values and the
    column names

    techniques used

    well , i used decision tree classifier which can be


    directly imported from sklearn.tree module.
    1. Label encoder for converting the categorical values
    to decimal values.
    2. I used pandas to read csv files.
    3.I used matplotlib indirectly for plotting the graphs
    using pandas inbuilt hist method to draw a histogram
    4. Numpy
    5. accuracy_score , classification_report and
    confusion_matrix from sklearn.metrics for better analysis
    of my model.

    Result
    1. I have used to criterian of decision tree i.e. entropy
    and then gini.
    2.accuracy score for entropy is 81 % whereas for gini it
    is 80 % approx

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