Credit Scoring Model Based on Neural Network with Particle Swarm Optimization

Credit scoring has gained more and more attentions both in academic world and the business community today. Many modeling techniques have been developed to tackle the credit scoring tasks. This paper presents a Structuretuning Particle Swarm Optimization (SPSO) approach for training feed-forward neural networks (NNs). The algorithm is successfully applied to a real credit problem. By simultaneously tuning the structure and connection weights of NNs, the proposed algorithm generates optimized NNs with problem-matched information processing capacity and it also eliminates some ill effects introduced by redundant input features and the corresponding redundant structure. Compared with BP and GA, SPSO can improve the pattern classification accuracy of NNs while speeding up the convergence of training process.