engleski

Multinomial model in consumer credit scoring

Credit scoring is a process of determing how likely applicants are to default withe their repayments. It has been used in consumer lending for more then three decades. Data sample of consumer credits used in this research is divided into three groups - good, poor and bad. The aim of this paper is to explore the possibility of using poor applicants in developing a credit scoring model. In ordet to accomplish this, multinomial models have been developed. Also, for the purpose of obtaining results as good as possible, three binomial models have been built. These models are compared according to significant variables and classification accuracy after which the best model is extracted.

credit scoring; multinomial model; logistic regression

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