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This project aims at applying Boosting on decision tree and improving results of credit risk analysis with time, space and accuracy as metrics.

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Sohaib-Ahmed21/Credit_Risk_Analysis

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Credit_Risk_Analysis

This project aims at applying Boosting on decision tree and improving results of credit risk analysis with time, space and accuracy as metrics.

Decision Tree and Gradient Boosting Overview

This project implements Decision Tree and Gradient Boosting algorithms to solve credit risk assessment problems. Decision trees use entropy and information gain to split data, building a hierarchical tree for classification or regression. Gradient Boosting enhances decision trees by iteratively training multiple weak models to correct the errors from previous models.

Key Concepts

  • Entropy: Measures uncertainty in data; lower entropy indicates more homogeneity.
  • Information Gain: Evaluates the reduction in entropy from a split; the feature with the highest gain is selected for splitting.
  • Time & Space Complexity:
    • Decision Tree: Average time complexity is (O(n \cdot m \cdot \log n)), where n is the number of samples and m is the number of features.
    • Gradient Boosting: Involves multiple decision trees, with time complexity (O(M \cdot n \log n)) in the average case, where M is the number of trees.

Achievements

  • Achieved high accuracy using Gradient Boosting for credit risk prediction.
  • Successfully handled decision tree modifications and optimizations for performance improvements.

Challenges

  • Dealing with imbalanced data, outliers, and missing values.
  • Balancing accuracy vs. complexity for optimal results.

Conclusion and Future Work

The project demonstrated the effectiveness of decision trees and Gradient Boosting for credit risk assessment. Future improvements include exploring neural networks, deep learning, and other ensemble methods to enhance accuracy and efficiency.

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This project aims at applying Boosting on decision tree and improving results of credit risk analysis with time, space and accuracy as metrics.

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