KNN Classifier: In this section we would cover K-NN in Python. As we have already covered basics of K-NN algorithm in our previous topic, so in this section we would look into Python libraries we need to have in our system, Python Commands required to implement the K-NN logic. So Let us start with our step by step process of implementation of K-NN.

We will try to predict probability of default/Non-Default using Naïve Bayes algorithm. Please download the data provided in the data repository section.

Step 1: Import the Libraries. We would use three libraries for this analysis:

- numpy
- pyplot
- pandas

Use below command to import the libraries.

Step 2: Import the data set.

Step 3: Splitting the data set into the Training set and Test set. Provided data set has 300 observations, we would divide it into 75%-25% for training and testing purpose.

Step 4: **Feature Scaling**: Since range of two of our predictor variables is very different, while Age varies from 18-60 whereas salary varies from 1127-142293. We need to do feature scaling so that both of the variables have same proportional impact on the target variable. In the following command we are excluding the target variable from feature scaling which is at position 3.

Step 5: Fitting K-NN to the Training set

Step 6: Predicting the Test set results

Step 7: Checking the accuracy of data model using confusion matrix