Is a credit analyst a good job?

Airen Herbals
March 24, 2021
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Is a credit analyst a good job?

credit analyst

A credit analyst position is often confused with the role of a loan officer. A credit analyst works using various software programs reviewing the financial picture of a business and determining the level of risk lending money. They evaluate the risk factor that influences loan applications and approvals. They are accountable for gathering and inspecting the financial background of applicants. They are also responsible for analysing clients paying records and income. The professional focuses on examining the client’s credit-related data to determine the financial risk that may occur in case of being conferred a credit. Credit analyst employs in the financial institution and agencies specialized in various areas such as insurance or investment.

What does a credit analyst do?

  • They support new and current clients on credit products
  • They conduct meetings with clients to gather data about the financial background and identifying their needs
  • They assess applicants earning and spending capacity
  • They promote credit line and products attending clients financial need
  • Examine financial data, tax return, balance sheet, and other financial documents
  • Analyze the trend observed in documentation reviewed
  • Highlight abnormality of information gap
  • Determine various risk factors
  • Examine clients payment source and prepare detail reports on findings
  • Assist managers before credit approval
  • Examine applicants asset and finances
  • Contact financial institution to verify the financial background of credit applicant
  • Collect data and process each file to the closing stage
  • Analyze applicants repayment ability and conduct a thorough assessment of creditworthiness
  • Maintain detailed record on applicants background
  • Keep an up to date and accurate list of annual review required to pursue loan
  • Compile, copy, sort and file records of application in progress and the one which is already approved
  • Prepare credit reports
  • Ensure compliances with internal control  and establish policies related to credit products, guaranteeing transparency in every application processed

How to become a credit analyst

Here are given few steps you may follow to become a credit analyst.

Step 1: Get proper education

A credit analyst needs to have at least a bachelor’s degree in finance, accounting, or related discipline. Earning this degree will help you gain knowledge in statistics, economics, ratio analysis, calculus, industry assessment, and financial assessment. The combination of these subjects is essential to evaluate the client’s business environment.

You may search for schools that offer work-study opportunities. The role credit analyst needs to have a lot of experience as well as financial training. Candidate must make sure degree includes various subjects like managerial accounting, economics, fiscal policy, monetary policy, money market, financial management, capital market, budgeting, financial investment analysis, portfolio management, financial derivatives, econometrics, and financial quantitative analysis. While pursuing graduation, you must look for various openings in financial sectors, banks, and investment firms.  You may seek a job in account receivable, accounting, and credit application processing. The job can boost your experience in a related field.

Step 2: Attain the right certification

Though a credit analyst certification is not required employers prefer credit analysts to have a bachelor’s degree with work experience. There are training courses available that cover 36 hours of online teaching of basics of credit analyses and pass a background check. You may find training programs through NACA because their certification is accredited and also have credit analyst job listing.

Step 3: Become a CFA

Becoming a chartered financial analyst will increase the integrity and competency of financial analysts. To become CFA, you must hold a bachelor’s degree and must have 4 years of experience in the finance field. You may apply through the CFA institute and this would allow you to work while undergoing the course. The course will take four years to complete and needs to have experience worked in the financial sector in a full-time role. After completing the course get credit business associate designation approved by NACM. This could help you to get a job in the credit management industry.

Step 4: Join a course to become a CBA

There are various courses available that focus on basic financial accounting, credit principles, and financial statement analysis. There is no work experience required to become a CBA. Candidates can now acquire credit business fellow designation. The CBF designation builds CBF certification from NACM adding knowledge of credit law to your profession.

Step 5: Get into a job

Credit analyst performs various job daily for clients. Once you are hired, you need to use your skills to evaluate credit data, process financial statements, determine loan risk, and fill loan documents. You may also perform a job for commercial clients. The job will help you to deal with verifying transactions and handle disputes. Broad education in finance will help you to apply for a job in various fields as a credit analyst. Make sure you remain diligent in your job. You must be ready to multitask.

Required skills a credit analyst must have

  • Interpersonal and communication skills – They must communicate both writing and verbally. They must maintain a supportive working relationship with clients
  • Organizational and time management skills – To manage time efficiently, they must prioritize their work. They must be able to perform multi-tasking.
  • Administrative skills – Must have experience creating graphics, flow charts, and projections. They must be computer savvy and expert handling MS office and spreadsheet software.
  • Strong attention to detail – stay focused while performing a repetitive task. Remain efficient and accurate reviewing accounting and financial data into a database.
  • Goal-oriented focused, and flexible – The professional needs to be reliable, confident, and self-motivated. They must be able to work independently.
  • Research and analysis skill – A credit analyst need to create and study a set of numbers. Sometimes they are assigned to work with companies that operate in a given industry. So they need to perform research to gain a detailed understanding of the industry.

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