Credit risk assessment machine learning

  • What is credit risk assessment?

    Credit risk analysis is the means of assessing the probability that a customer will default on a payment before you extend trade credit.
    To determine the creditworthiness of a customer, you need to understand their reputation for paying on time and their capacity to continue to do so..

  • a) Credit risk modelling
    Nevertheless, they can still be used to optimize parameters and improve the variable selection process in existing regulatory models.
    AI based decision tree techniques can result in easily traceable and logical decision rules despite having non linear characters.
  • AI credit scoring decisions are based on a lot of data, such as total income, credit history, transaction analysis, work experience, and even Google Analytics.
    In essence, scoring represents a mathematical model based on statistical methods and accounting for a large amount of information.
  • Models like Altman Z score and Moody's Risk Calc account for well-known financial ratios that can be useful in determining credit risk, such as debt-to-equity ratio, current ratio, and interest coverage.
Oct 13, 2020Credit risk is associated with the possibility of a client failing to meet contractual obligations, such as mortgages, credit card debts, and 
Oct 13, 2020In this article, we will build a model to predict the risk of client default for Nubank, a prominent Brazilian Fintech.

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