A Survival Analysis Methodology for Credit Granting Decision
Student Name: Kamaljeet Bhatia
Instead of classifying credit card customers as defaulter and non-defaulter,
the current thinking in credit business is to assess customers as to how
profitable they are. The time from a card is issued till the time a customer
defaults is an important variable in assessing their profitability. Here
an attempt is made to model and predict the survival probability (in terms
of time to default) of private label credit card customers for credit
granting decisions. The hazard rate of time to default dependent variable
is modeled in terms of various demographic and psychographic variables
using the Cox proportional hazard model. Significant covariates are identified
and survival probabilities are estimated using Breslow's and Kalbfleisch
& Prentice's method based on the fitted model, which proved to be
extremely useful for the organization where the project was undertaken.