Chapter 6
Credit Risk Detection and Prediction – Predictive Analytics
Section 3
Modeling Using Logistic Regression
Logistic regression is a type of regression model where the dependent or class variable is not continuous but categorical, just as in our case, credit rating is the dependent variable with two classes. For our model, since we are dealing with a binary classification problem, we will be dealing with binomial logistic regression. - Train the initial model with all the independent variables - Perform predictions on the test data and evaluate the results - Build another model and test model performance on test data