Chapter 6. Credit Risk Detection and Prediction – Predictive Analytics

In the previous chapter, we covered a lot of ground in the financial domain where we took up the challenge of detecting and predicting bank customers who could be potential credit risks. We now have a good idea about our main objective regarding credit risk analysis. Besides this, the substantial knowledge gained from descriptive analytics of the dataset and its features will be useful for predictive analytics, as we had mentioned earlier.

In this chapter, we will be journeying through the world of predictive analytics, which sits at the core of machine learning and data science. Predictive analytics encompasses several things which include classification algorithms, regression algorithms, domain knowledge, and business logic which are combined to build predictive models and derive useful insights from data. We had discussed various machine learning algorithms at the end of the previous chapter which...