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Logistic regression aims to model the probability of an event occurring depending on the values of independent variables.
The logistic regression model seeks to estimate that an event (default) will occur for a randomly selected observation versus the probability that the event does not occur. Suppose we have data for 1000 loans along with all the predictor variables and also whether the borrower defaulted on it or not. Here the probability of default is referred to as the response variable or the dependent variable. The default itself is a binary variable, that is, its value will be either 0 or 1 (0 is no default, and 1 is default).
