Classification methods applied to credit scoring: A systematic review\n and overall comparison

2016/02/05 by Francisco Louzada, Louzada, Francisco, Anderson Ara +3 · 2 citations
Business, Management and Accounting · #Financial Distress and Bankruptcy Prediction

paper · pdf · doi:10.48550/arxiv.1602.02137

Abstract

The need for controlling and effectively managing credit risk has led\nfinancial institutions to excel in improving techniques designed for this\npurpose, resulting in the development of various quantitative models by\nfinancial institutions and consulting companies. Hence, the growing number of\nacademic studies about credit scoring shows a variety of classification methods\napplied to discriminate good and bad borrowers. This paper, therefore, aims to\npresent a systematic literature review relating theory and application of\nbinary classification techniques for credit scoring financial analysis. The\ngeneral results show the use and importance of the main techniques for credit\nrating, as well as some of the scientific paradigm changes throughout the\nyears.\n

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