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Credit scoring using Logistic regressionHara Khanam, Iftho January 2023 (has links)
In this thesis, we present the use of logistic regression method to develop a credit scoring modelusing the raw data of 4447 customers of a bank. The data of customers is collected under 14independent explanatory variables and 1 default indicator. The objective of this thesis is toidentify optimal coefficients. In order to clean data, the raw data set was put through variousdata calibration techniques such as Kurtosis, Skewness, Winsorization to eliminate outliers.On this winsorized dataset, LOGIT analysis is applied in two rounds with multiple statisticaltests. These tests aim to estimate the significance of each independent variable and modelfitness. The optimal coefficients can be used to obtain the credit scores for new customers witha new data set and rank them according to their credit risk.
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