Credit Analysts

Understanding What Credit Analysts Do

July 19, 2017

Being a credit analyst is not an easy thing to do because it requires carrying financial responsibilities every day. Credit analysts decide who’s worthy receiving a credit loan and who’s not, therefore their level of stress-resilience and financial literacy should be very high. These people work directly with financial institutions that are lending money. These financial institutions include investment firms, credit rating agencies, credit card companies, and commercial and investment banks. Keep reading this article if you want to understand if you really have what it takes to become a credit analyst.

The Job of a Credit Analyst

The main function of a credit analyst is to collect and analyze financial data relating to credit applicants. This data includes credit history, earnings, purchase activities, saving as well as payment habits.

The more data a credit analyst has, the more accurate evaluation of client’s creditworthiness he/she can make. The gathered data should be actual and accurate, otherwise objective analyses will not be possible. When data is analyzed, a credit analyst goes to recommending a list of actions to the client. For instance, if a credit card company hires a credit analyst, it may ask him/her to gather the info about the current customers and make recommendations. Upon the completion of the analyses, a credit analyst can advise to close the card accounts of certain customers based on their past bad financial decisions and behaviors.

Education for a Credit Analysis

In order to become a credit analyst, one needs to have, at least, a Bachelor’s degree in accounting, finance, or other related field. Having this degree will require a person to get extensive knowledge in such disciplines as economics, finance, statistics, calculus, financial statement analyses and industry assessment, as well as many other subjects. Having this knowledge will help a credit analyst to make accurate decisions on a daily basis.

There are, however, financial institutions that prepare their own credit analysts and provide them with all the necessary training until they become fully qualified to perform this job. Some financial institutions, which are searching for credit analysts, require the candidates to have CFA certification (certification of Chartered Financial Analyst).

Key Skills for a Credit Analyst:

  • Diligence. Missing one single piece of data can have very serious consequences in the job of a credit analyst. This is why attention to details is crucial. A credit analyst is appreciated for making credit decisions that carry an enormous amount of financial weight and accuracy.  
  • Communication Skills. A credit analyst should communicate with clients, coworkers, and superiors, therefore their communication skills should be rather high. Both written and oral communication skills are needed.
  • Quantitative Analysis. No need to explain this one. No credit analyst can exist without this skill.
  • Multitasking and Prioritization. The ability to work on several projects simultaneously and give correct priorities is also crucial.
  • Industrial Specialization. A credit analysts is to develop an insight into the details of the industry where he/she works.

Have more questions about the work of a financial analyst? Ask them in the comments section! We will be happy to answer.

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