Credit Default Modelling Using Decision Trees

jatindeep singh

Abstract: Machine Learning Algorithms have historically been used in the Credit and Fraud Space. With the increase in computational power, the Industry has made a move from Tree-based Logit models to more advanced Machine Learning Techniques involving Bagging and Boosting. industry. The article is designed to provide the readers with a Mathematical View of Decision Trees, Bagging, and Random Forest Algorithms. In the final section, the writer discusses how to use these techniques for Credit Default and Fraud Prevention using Data from LendingClub.