LOGISTIC REGRESSION AND MULTICRITERIA DECISION MAKING IN CREDIT SCORING

The paper aims to develop models for evaluating credit risk of small companies for one Croatian bank using two different methodologies – logistic regression and multicriteria decision making. The first method’s result is the probability of default while the second method’s result is the classification of the firms regarding predefined criteria for credit scoring. The paper gives the hints how to combine these two methods in order to construct an efficient strategy for achieving high performance.

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