Everything You Need to Know About the AUC Metric

What the area under the ROC curve measures, why it became so popular, and when it can mislead you

Suppose a bank builds a model to predict which borrowers are most likely to default.

The model gives every applicant a score. A borrower with a score of 0.90 is considered riskier than one with a score of 0.30.

The bank then asks a simple question:

Does the model generally assign higher scores to borrowers who eventually default?

The AUC metric is one of th…