The job of being a credit analyst has plenty of responsibilities. In general, credit analysis refers to the job of assessing loan application based on the worthiness or capacity to pay of the applicant. The applicant can be a company or an individual person. On the other hand, the credit analyst can choose on what area of credit he prefers to work on. Typically, credit analysts are employed by investment and commercial banks, investment companies, credit rating agencies, and credit card issuing institutions.
A credit analyst gathers and analyzes financial information about clients that include savings and earnings information, paying history or habits, and purchase activities. As soon as data are gathered, the credit analyst assesses the data and proposes for route of actions for the clients. For instance, a credit analyst who is working in a bank issuing credit cards can start collecting data about clients who have faulty payments. After the data had been analyzed, the credit analyst can recommend decreasing the credit line or closing the card of the client. Moreover, a credit analyst is also responsible in recommending potential clients for new credit cards or extension of credit line.
As part of educational requirements for a credit analyst, he or she should have a bachelor’s degree in accounting, finance, or any related field. This is for minimum. A bachelor’s degree in accounting or finance gives exposure to subjects like financial statement analysis, industry assessment, economics, calculus, ratio analysis, statistics, finance, and accounting of course. Such subjects are essentially needed in credit analysis because risk assessment assistance is applied. Educational subjects like ratio analysis and industry are also essential because in assessing a company for credit analysis will also require assessment of its environment.
On the contrary, there are some companies that may not require the abovementioned degrees. Instead, some companies would facilitate trainings for credit analyst employees with non-finance related degrees. If an individual is applying for a credit analyst job but with business-related degree, he is required to have work experience on finance/accounting-related field. Depending on the job level, some companies may require the credit analyst the designation of Chartered Financial Analyst (CFA).
One great advantage of being a credit analyst is not being limited to a one single type of company, credit rating agency or bank. A credit analyst is free to work for any institution that has financing offers on its services and products regardless if it’s an energy company, utility, retail, or automobile manufacturer.
Another exciting advantage of being a credit analyst is having interesting and higher career paths like loan and trust manager, portfolio manager, and investment banker. According to salary.com website, the earnings of an average credit analyst with bachelor’s degree are between $34,000 and $57,000.
With the mentioned advantages above of being a credit analyst, it may sound that the job is easy and lucrative to do. What you don’t know is that being a credit analyst is a stressful job as well. All decisions being made by a credit analyst will identify the interest rate of the borrowing value of a certain company or individual. The amount and release of the loan or extension of the credit line of the borrower will also depend on the inputs and recommendations of the credit analyst. The responsibilities of a credit analyst is very huge, thus it should not be taken flippantly. The job requires plenty of hard work that should be seriously taken.