A Data Science Central Community

In the context of credit scoring, one tries to develop a predictive model using a regression formula such as *Y* = Σ *w _{i} R_{i}*, where

- high dollar amount transaction
- high risk country
- high risk merchant category

This is the first order model. The second order model involves cross products *R _{i}* x

Note that when the weights are binary, this is a typical combinatorial optimization problem. When the weights are constrained to be linearly independent over the set of integer numbers, then each Σ *w _{i} R_{i}* (sometimes called unscaled score) corresponds to one unique combination of rules. It also uniquely represents a final node of the underlying decision tree defined by the rules.

**Contributions:**

- From Mark Hansen:
When the rules are binary, the problem is known as logic regression.

© 2020 AnalyticBridge.com is a subsidiary and dedicated channel of Data Science Central LLC Powered by

Badges | Report an Issue | Privacy Policy | Terms of Service

**Most Popular Content on DSC**

To not miss this type of content in the future, subscribe to our newsletter.

- Book: Applied Stochastic Processes
- Long-range Correlations in Time Series: Modeling, Testing, Case Study
- How to Automatically Determine the Number of Clusters in your Data
- New Machine Learning Cheat Sheet | Old one
- Confidence Intervals Without Pain - With Resampling
- Advanced Machine Learning with Basic Excel
- New Perspectives on Statistical Distributions and Deep Learning
- Fascinating New Results in the Theory of Randomness
- Fast Combinatorial Feature Selection

**Other popular resources**

- Comprehensive Repository of Data Science and ML Resources
- Statistical Concepts Explained in Simple English
- Machine Learning Concepts Explained in One Picture
- 100 Data Science Interview Questions and Answers
- Cheat Sheets | Curated Articles | Search | Jobs | Courses
- Post a Blog | Forum Questions | Books | Salaries | News

**Archives:** 2008-2014 |
2015-2016 |
2017-2019 |
Book 1 |
Book 2 |
More

**Most popular articles**

- Free Book and Resources for DSC Members
- New Perspectives on Statistical Distributions and Deep Learning
- Time series, Growth Modeling and Data Science Wizardy
- Statistical Concepts Explained in Simple English
- Machine Learning Concepts Explained in One Picture
- Comprehensive Repository of Data Science and ML Resources
- Advanced Machine Learning with Basic Excel
- Difference between ML, Data Science, AI, Deep Learning, and Statistics
- Selected Business Analytics, Data Science and ML articles
- How to Automatically Determine the Number of Clusters in your Data
- Fascinating New Results in the Theory of Randomness
- Hire a Data Scientist | Search DSC | Find a Job
- Post a Blog | Forum Questions

## You need to be a member of AnalyticBridge to add comments!

Join AnalyticBridge