Computational time reduction for credit scoring: An integrated approach based on support vector machine and stratified sampling method

With the rapid growth of credit industry, credit scoring model has a great significance to issue a credit card to the applicant with a minimum risk. So credit scoring is very important in financial firm like bans etc. With the previous data, a model is established. From that model is decision is taken whether he will be granted for issuing loans, credit cards or he will be rejected. There are several methodologies to construct credit scoring model i.e. neural network model, statistical classification techniques, genetic programming, support vector model etc. Computational time for running a model has a great importance in the 21st century. The algorithms or models with less computational time are more efficient and thus gives more profit to the banks or firms. In this study, we proposed a new strategy to reduce the computational time for credit scoring. In this approach we have used SVM incorporated with the concept of reduction of features using F score and taking a sample instead of taking the whole dataset to create the credit scoring model. We run our method two real dataset to see the performance of the new method. We have compared the result of the new method with the result obtained from other well known method. It is shown that new method for credit scoring model is very much competitive to other method in the view of its accuracy as well as new method has a less computational time than the other methods. 2011 Elsevier Ltd. All rights reserved.