An Analysis of the Practicality of DNN Models versus LR Models in Credit Scoring
TL;DR
The research results indicate that DNN models still exhibit significant limitations in credit scoring applications, and further model improvements or hybrid integration with other models are therefore required to enhance their practical applicability in real-world scenarios.
Abstract
Financial technology is playing an increasingly vital role in loan decision-making, and financial institutions are increasingly relying on machine learning techniques to support credit decisions. The purpose of this review is to provide a critical overview of analysis comparing the practical applicability of deep neural network (DNN) and logistic regression (LR) models within the credit scoring domain. This paper systematically collects existing studies on the application of DNN and LR models in credit scoring. The research objects include DNN and LR models, as well as their improved variants developed on the original model frameworks. On this basis, it integrates theoretical research findings with comprehensive analyses to investigate and evaluate the practicality of DNN models. The research results indicate that DNN models still exhibit significant limitations in credit scoring applications. Further model improvements or hybrid integration with other models are therefore required to enhance their practical applicability in real-world scenarios.