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Credit Scoring Models Using Ensemble Learning and Classification Approaches: A Comprehensive Survey

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Abstract

Credit scoring models are developed to strengthen the decision-making process specifically for financial institutions to deal with risk associated with a credit candidate while applying for new credit product. Ensemble learning is a strong approach to get close to ideal classifier and it strengthens the classifiers with aggregation of various models to obtain better outcome than individual model. Various studies have shown that heterogeneous ensemble models have received superior classification performances as compare to existing machine learning models. Enhancement in the predictive performance will result great savings of revenues for financial institution. And, in order to provide the higher stability and accuracy, ensemble learning produces commendable results due to their inherent properties for improving the effectiveness of credit scoring model. So, this study presents a comprehensive comparative analysis of nine ensemble learning approaches such as Multiboost, Cross Validation Parameter, Random Subspace, Metacoast, etc. with five classification approaches such as Partial Decision Tree (PART), Radial Basis Function Neural Network (RBFN), Logistic Regression (LR), Naive Bayes Decision Tree (NBT) and Sequential Minimal Optimization (SMO) along with various ensemble classifiers frameworks arranged in single and multi layer with various aggregation approaches such as Majority Voting, Average Probability, Maximum Probability, Unanimous Voting and Weighted Voting. Further, this study presents the impact of various combinations of classification and ensemble approaches on six bench-marked credit scoring datasets.

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Authors and Affiliations

  1. Thapar Institute of Engineering and Technology, Patiala, Punjab, 147004, India

    Diwakar Tripathi

  2. VIT University AP-Andhra Pradesh, Amaravati, Andhra Pradesh, 522237, India

    Alok Kumar Shukla

  3. SRM University AP - Andhra Pradesh, Amaravati, Andhra Pradesh, 522502, India

    B. Ramachandra Reddy

  4. National Institute of Technology Tiruchirappalli, Tiruchirappalli, Tamilnadu, 620015, India

    Ghanshyam S. Bopche

  5. Madanapalle Institute of Technology and Science, Madanapalle, Andhra Pradesh, 517325, India

    D. Chandramohan

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  1. Diwakar Tripathi
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  2. Alok Kumar Shukla
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  3. B. Ramachandra Reddy
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  4. Ghanshyam S. Bopche
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  5. D. Chandramohan
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A. K. Shukla, B. R. Reddy, G. S. Bopche, D. Chandramohan: These authors contributed equally to this work.

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Correspondence to Diwakar Tripathi.

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Tripathi, D., Shukla, A.K., Reddy, B.R. et al. Credit Scoring Models Using Ensemble Learning and Classification Approaches: A Comprehensive Survey. Wireless Pers Commun 123, 785–812 (2022). https://doi.org/10.1007/s11277-021-09158-9

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