Individuals seeking to join the credit industry look at a credit analyst description to find out if they are qualified for the job. A credit analyst is a credit professional specialized in financial risk analysis. Credit analysts are employed in commercial banks, credit card companies, and investment banks. The main role of a credit analyst is to evaluate the level of risk of potential corporate borrowers.
Credit analysts also provide credit risk guidance to financial institutions to help them mitigate losses from risky lending and customer defaults. The typical routine of a credit analyst includes reviewing financial statements, management accounts, asset inventories, financial data updates, as well as the past credit repayment history provided in the credit report.
A credit analyst job description is the first point of contact between the employer and the prospective hire.
A good credit analyst job description should specify the minimum requirements that potential candidates should meet, such as educational qualifications, level of experience, skills, etc.
Key components of a credit risk analyst job description include company overview, job responsibilities, skills and educational requirements, salary and benefits, and working hours.
Components of a Credit Analyst Description
A good job description for a credit analyst position should start with a compelling summary of the position being advertised and the responsibilities that potential candidates will play within the company. An employer may provide an overview of the company and its operations and the contribution that the position being advertised is required to bring to the company.
The job description should specify the requirements that potential candidates are required to meet, such as educational qualifications, level of experience, skills, specific designations, etc. It should be simple and clear so that potential candidates can know whether or not they are qualified.
Typical Responsibilities of a Credit Analyst
The credit analyst’s responsibilities can vary from one company to another. The following are the typical responsibilities of a credit analyst:
Assess the creditworthiness of current and prospective clients
Determine the level of risk involved in lending to each client
Perform the required monitoring of existing financial loans for compliance
Calculate financial ratios to assess the financial health of prospective clients
Calculate trend and cash flow analysis to evaluate the current financial status and create projections
Write recommendation reports to the credit committee and senior management for consideration
Evaluate a client’s financial statements and credit reports to determine their ability to honor debt obligations
Ensure approved loan applications comply with the company’s lending criteria
Identify discrepancies in credit files and reconcile them
Develop models of credit information to be used to predict future patterns and support credit analysis of new clients
A credit analyst must possess a minimum of a bachelor’s degree in several disciplines, such as accounting, finance, statistics, or economics. A background in the quantitative subjects equips candidates with essential skills and knowledge in ratio analysis, risk assessment, financial statement analysis, profitability ratios, and liquidity ratios. Some employers may also consider candidates with an associate degree in finance, accounting or economics, and relevant experience in a financial institution.
Although an industry certification is not always required, some employers may give preference to candidates who hold a specific designation, such as the Credit Risk Certification, Chartered Credit Analyst, or Credit Business Associate. A Master of Business Administration may be required for senior credit analyst positions that require greater expertise and industry experience.
The following are some of the important skills that an employer expects in a credit analyst:
Strong attention to detail and the ability to detect errors and discrepancies in client files
Strong proficiency in financial software, such as Microsoft Excel
Ability to work in a high-pressure work environment with competing deadlines
Ability to multi-task across multiple projects and/or clients
Excellent oral communication and reporting writing skills
Strong analytical and quantitative skills
Financial analysis skills
Willingness to maintain strict confidentiality of sensitive company and client information
Credit Analyst Salary and Benefits
The amount of salary paid to a credit analyst depends on the industry, knowledge, and experience. According to a 2015 report by the US Bureau of Labor Statistics, there are 70,840 credit analysts in the United States, with salaries ranging from $40,250 to $130,080. According to Payscale.com, the average credit analyst salary is $50,440.
The reported credit analyst salaries are highest at Fitch Ratings Corporation, where the average salary is $70,561. Other high-paying institutions in the US are Wells Fargo Banks, J.P. Morgan & Co., and Bank of America Corp., where credit analyst salaries average $54,938, $64,265, and $62,028, respectively.
An entry-level credit analyst with less than one year experience can expect to earn an average compensation of $44,806, while a mid-career credit analyst with five to nine years of experience can expect to earn an average compensation of $56,436.
Working Hours of a Credit Analyst
The work of a credit analyst is office-based, and an analyst can expect to work for an average of eight to 14 hours per day. Sometimes, credit analysts can work more hours into the night when deadlines are looming or when there is a critical situation that requires to be addressed by the credit team.
Although credit analysts spend most of their time in the office, they may be required to travel and inspect the client’s business premises, and it may add up to their total working hours in a day.
CFI offers the Commercial Banking & Credit Analyst (CBCA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following resources will be helpful:
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