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    Good and Bad Customers For Granting Credit: Genpact Data Science Prodegree Logistic Regression: Problem Statement

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    vishnuvk
    This document presents a problem statement for building a logistic regression classification model to predict customer credit risk for a bank. The goal is to minimize risk and maximize profit by predicting the likelihood of a customer defaulting on payments. The model will be trained on customer data that includes credit information, demographics, repayment history, bill amounts and previous payments for January through June. Model performance will be evaluated based on data preparation, comparing different models, and selecting the best model based on accuracy, sensitivity, specificity and the area under the ROC curve. The expected outcome is a model that achieves high accuracy in predicting defaults on new test data.

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    Good and Bad Customers For Granting Credit: Genpact Data Science Prodegree Logistic Regression: Problem Statement

    Uploaded by

    vishnuvk
    82 views2 pages
    This document presents a problem statement for building a logistic regression classification model to predict customer credit risk for a bank. The goal is to minimize risk and maximize profit by predicting the likelihood of a customer defaulting on payments. The model will be trained on customer data that includes credit information, demographics, repayment history, bill amounts and previous payments for January through June. Model performance will be evaluated based on data preparation, comparing different models, and selecting the best model based on accuracy, sensitivity, specificity and the area under the ROC curve. The expected outcome is a model that achieves high accuracy in predicting defaults on new test data.

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    This document presents a problem statement for building a logistic regression classification model to predict customer credit risk for a bank. The goal is to minimize risk and maximize profit by predicting the likelihood of a customer defaulting on payments. The model will be trained on customer data that includes credit information, demographics, repayment history, bill amounts and previous payments for January through June. Model performance will be evaluated based on data preparation, comparing different models, and selecting the best model based on accuracy, sensitivity, specificity and the area under the ROC curve. The expected outcome is a model that achieves high accuracy in predicting defaults on new test data.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    82 views2 pages

    Good and Bad Customers For Granting Credit: Genpact Data Science Prodegree Logistic Regression: Problem Statement

    Uploaded by

    vishnuvk
    This document presents a problem statement for building a logistic regression classification model to predict customer credit risk for a bank. The goal is to minimize risk and maximize profit by predicting the likelihood of a customer defaulting on payments. The model will be trained on customer data that includes credit information, demographics, repayment history, bill amounts and previous payments for January through June. Model performance will be evaluated based on data preparation, comparing different models, and selecting the best model based on accuracy, sensitivity, specificity and the area under the ROC curve. The expected outcome is a model that achieves high accuracy in predicting defaults on new test data.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Genpact Data Science Prodegree

    Logistic Regression: Problem Statement

    Good and Bad Customers for Granting Credit


    Problem Statement
    The banks with the intent of credit card were more focused on the number of customers
    using their credit service but the drawback of them not being able to pay back the credit in
    time was an issue that soon followed, a system was in need to effectively decide the credit
    limit to be allowed to a person based on his previous credit history. You will learn how to
    apply Logistic Regression to credibility of the customer. Also learn how to evaluate Logistic
    Regression model using various parameter like on Accuracy, Sensitivity, Specificity and
    area under the ROC curve.
    Build a classification model using logistic regression to predict the credibility of the
    customer, in order to minimize the risk and maximize the profit of a bank.

    Data Description
     Customer ID: Unique identification of each customer
     Credit_Amount: Credit amount in dollars
     Gender: 1=Male, 2=Female
     Academic_Qualification: 1=Undergraduate, 2=Graduate, 3=Postgraduate,
    4=Professional, 5=Others, 6=Unknown
     Marital:1=Married, 2=Single, 3=Do not prefer to say
     Age_Years: Age in years
     Repayment_Status_Jan: Repayment status in Jan (0=Paid on time, 1=Payment delay
    for one month, 2=Payment delay for two months, ... 6=Payment delay for six
    months)
     Repayment_Status_Feb: Repayment status in Feb (Scale same as above)
     Repayment_Status_March: Repayment status in March (Scale same as above)
     Repayment_Status_April: Repayment status in April (Scale same as above)
     Repayment_Status_May: Repayment status in May (Scale same as above)
     Repayment_Status_June: Repayment status in June (Scale same as above)
     Jan_Bill_Amount: Amount of bill statement in Jan (In dollars)
     Feb_Bill_Amount: Amount of bill statement in Feb (In dollar)
     March_Bill_Amount: Amount of bill statement in March (In dollar)
     April_Bill_Amount: Amount of bill statement in April (In dollar)
     May_Bill_Amount: Amount of bill statement in May (In dollar)
     June_Bill_Amount : Amount of bill statement in June (In dollar)
     Previous_Payment_Jan: Amount of previous payment in Jan (In dollar)
     Previous_Payment_Feb: Amount of previous payment in Feb (In dollar)
     Previous_Payment_March: Amount of previous payment in March (In dollar)
     Previous_Payment_April: Amount of previous payment in April (In dollar)
     Previous_Payment_May: Amount of previous payment in May (In dollar)
     Previous_Payment_June: Amount of previous payment in June (In dollar)
     Default_Payment: Default payment of next month (1=yes, 0=no)
    Evaluation Parameters

    Confidential and restricted. Do not distribute. (c) Imarticus Learning 1


    Genpact Data Science Prodegree
    Logistic Regression: Problem Statement
    Evaluation will be based on:
     Data Preparation
     Model Comparison
     Model Selection

    Data Preparation
    Analyze the data statistically and treat the multicollinear variables.

    Model Comparison
    Apply logistic regression algorithms for every change made in the datasets and compare
    results.

    Model Selection
    Select the best model. Model selection to be based on Accuracy, Sensitivity & Specificity and
    area under the ROC curve.

    Expected Outcome
    Higher accuracy in predicting the outcome using test data.

    Confidential and restricted. Do not distribute. (c) Imarticus Learning 2

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