Credit Card Approval Prediction : A comparative analysis between logistic regressionclassifier, random forest classifier, support vectorclassifier with ensemble bagging classifier.

Sammanfattning: Background. Due to an increasing number of credit card defaulters, companies arenow taking greater precautions when approving credit applications. When a customermeets certain requirements, credit card firms typically use their experience todecide whether to grant them a credit card. Additionally, a few machine learningmethods have been applied to support the final decision. Objectives. The aim of this thesis is to compare the accuracy of logistic regressionclassifier, random forest classifier, and support vector classifier with the ensemblebagging classifier for predicting credit card approval. Methods. This thesis follows a method called general experimentation to determinethe most accurate classification technique for predicting credit card approval. Thedataset is taken from Kaggle, which contains information about credit card applications.The selected algorithms are trained with training data and validate themusing validation data then evaluate their performance on the testing data by usingmetrics such as accuracy, precision, recall, F1 score, and ROC curve. Now ensemblelearning bagging technique is applied to combine the predictions of these multiplemodels using majority voting to create an ensemble model. Finally, the performanceof the ensemble model was evaluated on the testing data and compared its accuracyto that of the individual models to identify the most accurate classification techniquefor predicting credit card approval. Results. Among the four selected machine learning algorithms, the random forestclassifier performed better with an accuracy of 88.41% on the testing dataset.The second-best algorithm is the ensemble bagging classifier, with an accuracy of84.78%. Hence, the random forest classifier is the most accurate algorithm for predictingcredit card approval. Conclusions. After evaluating various classifiers, including logistic regression classifier,random forest classifier, support vector classifier, and ensemble bagging, it wasobserved that the random forest classifier outperformed the other models in termsof predicting accuracy. This indicates that the random forest classifier was better atpredicting credit card approval.