https://www.mdu.se/

mdu.sePublications
Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Customer credit scoring using a hybrid data mining approach
Department of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran.
Mälardalen University, School of Innovation, Design and Engineering, Innovation and Product Realisation.ORCID iD: 0000-0002-8524-3321
Department of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran.
2016 (English)In: Kybernetes, ISSN 0368-492X, E-ISSN 1758-7883, Vol. 45, no 10, p. 1576-1588Article in journal (Refereed) Published
Abstract [en]

Purpose: A crucial decision in financial services is how to classify credit or loan applicants into good and bad applicants. The purpose of this paper is to propose a four-stage hybrid data mining approach to support the decision-making process. Design/methodology/approach: The approach is inspired by the bagging ensemble learning method and proposes a new voting method, namely two-level majority voting in the last stage. First some training subsets are generated. Then some different base classifiers are tuned and afterward some ensemble methods are applied to strengthen tuned classifiers. Finally, two-level majority voting schemes help the approach to achieve more accuracy. Findings: A comparison of results shows the proposed model outperforms powerful single classifiers such as multilayer perceptron (MLP), support vector machine, logistic regression (LR). In addition, it is more accurate than ensemble learning methods such as bagging-LR or rotation forest (RF)-MLP. The model outperforms single classifiers in terms of type I and II errors; it is close to some ensemble approaches such as bagging-LR and RF-MLP but fails to outperform them in terms of type I and II errors. Moreover, majority voting in the final stage provides more reliable results. Practical implications: The study concludes the approach would be beneficial for banks, credit card companies and other credit provider organisations. Originality/value: A novel four stages hybrid approach inspired by bagging ensemble method proposed. Moreover the two-level majority voting in two different schemes in the last stage provides more accuracy. An integrated evaluation criterion for classification errors provides an enhanced insight for error comparisons.

Place, publisher, year, edition, pages
2016. Vol. 45, no 10, p. 1576-1588
Keywords [en]
Classifier, Credit scoring, Ensemble learning, Hybrid algorithms, Voting
National Category
Computer and Information Sciences
Identifiers
URN: urn:nbn:se:mdh:diva-34533DOI: 10.1108/K-09-2015-0228ISI: 000530317200006Scopus ID: 2-s2.0-85002014738OAI: oai:DiVA.org:mdh-34533DiVA, id: diva2:1059199
Available from: 2016-12-22 Created: 2016-12-22 Last updated: 2021-05-03Bibliographically approved

Open Access in DiVA

No full text in DiVA

Other links

Publisher's full textScopus

Search in DiVA

By author/editor
Ahmadzadeh, Farzaneh
By organisation
Innovation and Product Realisation
In the same journal
Kybernetes
Computer and Information Sciences

Search outside of DiVA

GoogleGoogle Scholar

doi
urn-nbn

Altmetric score

doi
urn-nbn
Total: 693 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf