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CREDIT CARD APPROVAL PREDICTION

2103A52016 – G. Rishitha
2103A52057 – M. Siri Chandana
2103A52035 – T. Saiteja
2103A52050 – K. Mithra sri

Supervised by:
G. Neelima
Professor Dept. of CS&AI

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CONTENTS
S.NO TITLE PG.NO
1. Abstract 04
2. Introduction 05
3. Motivation and background 06
4. Objectives 07
5. Literature Survey 08-09
6. Existing Systems 10
7. Disadvantages 11
8. Existing Methodologies 12
9. Gaps Indentifies 13
10. Proposed Methodology 14-15
11. Proposed Architecture 16
12. Results 17
13. Overall Accuracies 18
14. Comparative study of proposed
and existing 19
15. Conclusion and Future scope 20 3
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ABSTRACT
● This study delves into credit card approval data through exploratory data analysis (EDA) to uncover influential
factors.
● We analyze income distribution, credit history, and debt-to-income ratios to identify patterns and indicators of
approval likelihood.
● we utilize Power BI for dynamic visualizations, offering comprehensive insights. Our findings highlight approval
rate trends and credit-related variables, aiding financial stakeholders.
● Through EDA, we establish a robust understanding of the credit approval landscape. Leveraging Power BI, we
create interactive dashboards and trend analyses, facilitating informed decision-making. This research enhances
understanding of credit risk assessment and decision-making processes. By distilling complex data into actionable
insights, we empower stakeholders in the financial sector.

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 INTRODUCTION

● Traditional credit card approval processes relied on manual assessments and subjective decision-
making, leading to inefficiencies and errors.
● This project leverages machine learning models such as Random Forest, Decision Tree, Logistic
Regression, Support Vector Machine, and Neural Network algorithms to predict credit card approval
accurately.
● Exploratory Data Analysis (EDA) is employed to understand the data structure, identify outliers,
missing values, and relationships between attributes, enhancing the efficiency and accuracy of the
prediction process.
● Power BI is utilized for powerful visualization capabilities, allowing stakeholders to gain insights from
the data visually.
● The project aims to streamline credit card approval processes, minimize manual labor, and improve
accuracy through data-driven approaches and advanced machine learning techniques.

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 MOTIVATION AND BACKGROUND
● The motivation behind credit card approval prediction stems from the need for efficiency, accuracy, and
fairness in decision-making.
● Traditional methods often struggle to handle the vast amount of data associated with credit card
applications, leading to delays, errors, and inconsistencies.
● The background behind credit card approval prediction lies in the evolution of data science and its
application in finance.
● As data becomes increasingly abundant and accessible, financial institutions are embracing advanced
analytics techniques to gain a competitive edge.
● Predictive modeling, coupled with EDA, not only improves the efficiency of credit card approval but also
enhances risk management practices, fraud detection, and customer experience.

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 OBJECTIVES
● Enhance Decision-making Efficiency: Implement machine learning models to automate the credit card
approval process, reducing the time and resources required for manual review.
● Improve Accuracy: Develop predictive models that accurately assess the creditworthiness of applicants
based on historical data and relevant features, leading to more reliable approval decisions.
● Mitigate Risk: Identify high-risk applicants early in the process by leveraging predictive analytics, thereby
reducing the likelihood of default and minimizing potential losses for the financial institution.
● Ensure Fairness and Compliance: Incorporate fairness metrics into the predictive models to mitigate
biases and ensure that credit card approval decisions are made impartially and in compliance with regulatory
requirements.
● Optimize Customer Experience: Streamline the application process by providing quick and transparent
decisions to applicants, enhancing overall customer satisfaction and loyalty.

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LITERATURE SURVEY
Paper Title Approach Journal/pub Research Future Dataset used
lisher gap scope
Credit card approval A systematic literature Journal of theoretical Lack of detailed Exploring Accurate loan approval
prediction: a review aimed at and applied literature review on potential of other prediction based on
systematic literature finding the best information existing studies using machine learning machine learning approach
review algorithms for credit technology. machine learning for algorithms for
Author: Indrajani, card approval Little lion scientific credit card approval credit card
sutedja prediction approval
Year: 2024 prediction

Credit card approval Implementing machine International journal of The need for improved Enhanced Not provided(Literature
prediction using learning algorithms advanced Research in accuracy and machine learning review)
Machine learning like logistic regression science, transparency in credit models for more
Author: sawan and random forest for Communication and card approval accurate credit
Nihakthar, Aditya credit card approval technology(IJARSCT) processes. card approval
Sahari prediction prediction
Year:2023

Credit card Analytics: A Review article International Journal of Despite advancements, Future directions Fraud Detection and Risk
review of fraud summarizing Computer Trends and challenges persist in include proactive Assessment Techniques
detection and risk methodologies and Technology (IJCTT) fraud detection and credit fraud detection Fraud Detection and Risk
assessment techniques techniques in credit card risk assessment, such as using technologies Assessment Techniques
Author: Kaushikkumar fraud detection and imbalanced datasets and like artificial
patel risk assessment. evolving intelligence and
Year: 2023 fraudulent techniques integrating multiple
data sources for
enhanced

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 LITERATURE SURVEY
JOURNAL
RESEARCH FUTURE DATASET
PAPER APPROACH PUBLISHE
GAP SCOPE USED
TITLE R
Credit Card Score Investigating Not provided n Lack of The future work A new dataset
Prediction using machine the text previous studies aims to from an
Machine Learning
learning models utilizing the enhance MLP American bank
Models: A New
Dataset Year: for default newly proposed (model’s is used
2023 Authors: prediction using dataset for accurate and
Anas Arram, Masri a new dataset credit card recall) values to
Ayob, prediction make it a more
powerful model
Predicting Comparing the Not provided Lack of detailed Exploring the Credit card
Credit card accuracy of literature review potential of approval data
approval using ,machine on the existing other machine from Kaggle .
machine learning studies using learning Preprocessed
learning . algorithms in machine algorithms for for model
Year: 2023 predicting credit learning models Credit card training and
Author : card approval approval evaluation
semasuka. using a data
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from Kaggle.
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EXISTING SYSTEM
1. Credit Karma:
Credit Karma is a popular platform that offers free credit scores and credit monitoring services to users. Credit
Karma provides users with credit scores and insights into their credit health, our project focuses specifically on
automating the credit card approval process.
2. FICO Score:
FICO Score is a well-known credit scoring system used by many financial institutions to assess creditworthiness.
FICO Score provides a numerical credit score to individuals, our project goes further by automating the entire
credit card approval process.
3. Lending Club:
Lending Club is a peer-to-peer lending platform that connects borrowers with investors. LendingClub facilitates
loans between individuals, our project focuses specifically on automating credit card approval decisions for
financial institutions.

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DISADVANTAGES

1. EDA (Exploratory Data Analysis): One limitation is that EDA alone may not provide a complete
understanding of the underlying patterns in the data
2. Power BI: While Power BI is a powerful tool for data visualization, it does have limitations in terms of
advanced analytics and model building.
3. Neural Networks: Neural networks are powerful for capturing intricate patterns in data. However, they
require large amounts of labeled data for training and can be computationally intensive.
4. Random Forests: Random forests can handle complex relationships and reduce overfitting compared to
decision trees.

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EXISTING METHODOLOGY
1. Data Collection: gathers relevant data sources and ensure data integrity
2. Exploratory data analysis(EDA): Identifies missing values , outliers, and data inconsistencies
3. Data preprocessing: Handle missing data through imputation techniques or removal.
4. Feature engineering: It creates new features that may enhance model performance, such as credit utilization
ratios.
5. Model Selection and Training: it splits the data into training and testing data sets
6. Model Evaluation: It evaluates the performance of the models using accuracy, precision, recall, F1-Score.
7. Deployment with power BI: it enables users interaction with filters and slicers.
8. Monitoring and Maintainance : it addresses any sought of issues or drifts in model’s performance.

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GAPS IDENTIFIED:

• Exploring methods to enhance the fairness and robustness of machine learning models
• Machine learning holds great promise for optimizing the credit card approval process, there is a need for further
research to ensure that these models are interpretable, fair, and compliant with regulatory standards, addressing
potential gaps in transparency and fairness
• Limited resources are allocated for model maintainance .

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PROPOSED METHODOLOGY:
1.EXPLORATORY DATA ANALYSIS :
● We begin with EDA to understand the patterns in the data
● To identify the summary statistics , relationship between variables , missing values , Outliers.
2.DATA PREPOCESSING :
● HANDLE MISSING VALUES
● ENCODE CATEGORICAL VARIABLE : using one hot encoding or label encoding .
● FEATURE SELECTION : Identify relavant features through different techniques like correction
Analysis
3. FEATURE ENGINEERING:
● Create new Features
● Feature transformation
4. MODEL BUILDING:
Select appropriate machine learning algorithms suited for the task such as
● Logistic regression
● Decision tree
● Random forest
● SVM(Support vector machine) 14
 PROPOSED METHODOLOGY
5. Power BI Integration:
● Use power BI for interactive data visualization
● Connect power Bi to preprocessed Dataset and create bar chats , line charts etc.,
6.Model Deployment :
● Now deployment the model for real-world predictions through website

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PROPOSED ARCHITECTURE
PRESENTATION LAYER

HTML AND CSS

APPLICATION LAYER DATA ANALYSIS VISUALIZATION LAYER

Backend Logic Exploratory Data Analysis Power BI visualizations
Data visualization Machine learning Dashboard
Integration

DATABASE
MYSQL

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IMPLEMENTATION AND RESULTS

1. Data loading and exploration

2. Data Preprocessing
3. Data integration
4. Exploratory data analysis(EDA)
5. Model deployment
6. Model Evaluation
7. Deployment
8. Documentation and reporting
9. Continuation Improvement

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OVERALL ACCURACIES

Logistic Regression Accuracy: 0.9999543139091304

Random Forest Accuracy: 1.0
Decision Tree Accuracy: 1.0
Deep Learning Accuracy: 1.0
Mean Squared Error for Deep Learning: 0.0
Neural Network Accuracy: 0.7380359549535144

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COMPARITIVE STUDY OF PROPOSED AND EXISTING

● EDA AND FEATURE ENGINEERING : Proposed Methodology conducts a thorough exploratory data
analysis and feature engineering on the data and also conducts the feature engineering which helps to extract
meaningful insights the existing system has failed to do this .
● MODEL BUILDING : The proposed approach focuses on model robustness where as the existing model has
focused on accuracy
● POWER BI INTEGRATION : Proposed methodology uses power BI to visualize the data that can be well
understood by stakeholders to take correct decisions or to understand data properly . where existing approach
may lack on this ability .

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CONCLUSION
● Effective Credit Risk Management
● Data-Driven Insights
● Transparent Decision Making
● Improved Efficiency
● Enhanced Customer Experience
● By making best use of machine learning, Power BI, and EDA in credit card approval prediction, organizations
can optimize their processes, mitigate risks, and capitalize on opportunities while maintaining transparency,
efficiency, and compliance with regulatory standards.

FUTURE SCOPE
● Advanced Machine Learning Techniques
● Real-time Decision Support
● Predictive Analytics for Fraud Detection:
● Regulatory Compliance and Ethical AI 20
Thank You

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