Really good advice. Thanks Björn.

Thanks Björn. Could you please provide more info regarding "with various ideas like shrinking towards the mean to help avoid overfitting/target leakage"? As for the suitable splines, maybe I will try to find a spline with a monotonic trend (not sure if there is only one or not).

Thanks Dave. I have edited my question.

Thanks Alexis. The WOE is short for weight of evidence and it is a popular variable transformation technique in credit scorecard modelling.