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Journal ArticleDOI

A conservative approach for online credit scoring

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TLDR
This is the first study that develops an online non-parametric credit scoring system, which is able to reselect effective features automatically for continued credit evaluation and weigh them out by their level of contribution with a good diagnostic ability.
Abstract
This research is aimed at the case of credit scoring in risk management and presents a novel machine learning method to be used for the default prediction of high-risk branches or customers. This study uses the Kruskal-Wallis non-parametric statistic to form a conservative credit-scoring model and to study the impact on modeling performance on the benefit of the credit provider. The findings show that the new credit scoring methodology represents a reasonable coefficient of determination and a very low false-negative rate. It is computationally less expensive with high accuracy with around 18% improvement in Recall/Sensitivity. Because of the recent perspective of continued credit/behavior scoring, our study suggests using this credit score for non-traditional data sources for online loan providers to allow them to study and reveal changes in client behavior over time and choose the reliable unbanked customers, based on their application data. This is the first study that develops an online non-parametric credit scoring system, which is able to reselect effective features automatically for continued credit evaluation and weigh them out by their level of contribution with a good diagnostic ability.

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References
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Journal ArticleDOI

Financial ratios, discriminant analysis and the prediction of corporate bankruptcy

TL;DR: In this paper, a set of financial and economic ratios are investigated in a bankruptcy prediction context wherein a multiple discriminant statistical methodology is employed, and the data used in the study are limited to manufacturing corporations, where an initial sample of sixty-six firms is utilized to establish a function which best discriminates between companies in two mutually exclusive groups: bankrupt and nonbankrupt firms.
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A review of feature selection techniques in bioinformatics

TL;DR: A basic taxonomy of feature selection techniques is provided, providing their use, variety and potential in a number of both common as well as upcoming bioinformatics applications.
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Methodological issues related to the estimation of financial distress prediction models

TL;DR: In this paper, the authors examined conceptually and empirically two estimation biases which can result when financial distress models are estimated on non-random samples and showed that these biases can result in biased parameter and probability estimates if appropriate estimation techniques are not used.
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ZETATM analysis A new model to identify bankruptcy risk of corporations

TL;DR: In this paper, the authors explored the development of a bankruptcy classification model which incorporates comprehensive inputs with respect to discriminant analysis and utilizes a sample of bankrupt firms essentially covering the period 1969-1975.
Journal ArticleDOI

Advanced nonparametric tests for multiple comparisons in the design of experiments in computational intelligence and data mining: Experimental analysis of power

TL;DR: This paper focuses on the use of nonparametric statistical inference for analyzing the results obtained in an experiment design in the field of computational intelligence, and presents a case study which involves a set of techniques in classification tasks.
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