A SYSTEMATIC LITERATURE REVIEW OF PREDICTIVE MODELS AND ANALYTICS IN AI-DRIVEN CREDIT SCORING
DOI:
https://doi.org/10.70008/jmldeds.v1i01.36Keywords:
AI-Driven Credit Scoring, Predictive Models, Machine Learning, Risk Assessment, Financial Technology (FinTech)Abstract
This systematic review examines the transformative role of AI-driven models in credit scoring, highlighting their advances over traditional statistical methods in terms of predictive accuracy, adaptability, and inclusivity. By synthesizing findings from 70 studies, this review demonstrates that machine learning techniques, particularly ensemble models such as random forests and gradient boosting, effectively capture complex, non-linear relationships in borrower data, providing more accurate risk assessments across diverse demographics. Deep learning models, especially convolutional and recurrent neural networks, extend credit scoring capabilities to unstructured and alternative data sources, supporting financial inclusion by enabling assessments of individuals without traditional credit histories. Hybrid models that integrate logistic regression with neural networks offer an optimal balance between interpretability and predictive power, addressing regulatory demands for transparency while maintaining robust accuracy. Ensemble techniques like stacking and blending enhance model adaptability, allowing credit scoring systems to integrate multiple perspectives and improve prediction accuracy in varied borrower contexts. Despite these advancements, challenges remain in the form of ethical concerns and the need for model interpretability, particularly with complex deep-learning architectures. The review underscores the importance of developing fairness-aware and explainable AI frameworks to ensure that as AI-driven credit scoring evolves, it remains both transparent and equitable. These insights suggest that with careful attention to ethics and transparency, AI has the potential to create a more inclusive and resilient credit scoring landscape, accommodating the needs of an increasingly diverse global population.