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Credit Analyst

A finance professional who determines the creditworthiness of a borrower (an individual or a company)

What is a Credit Analyst?

A credit analyst is a finance professional whose primary function is to assess requests for credit and, after reviewing and analyzing the financial statements, determine through due diligence if an individual or company is worthy of receiving financing. It may be the first-time issuance of funds or refinancing. On a broader scale, credit analysts assess how risky a company is, determining through data analysis a company’s financial stability.

According to the Bureau of Labor Statistics (BLS), there are almost 75,000 credit analysts working in the United States as of May 2018.

 

Credit Analyst

 

Summary: 

  • A credit analyst is responsible for assessing an individual or company’s overall financial health and creditworthiness, specifically in regard to new requests for financing or a line of credit.
  • Among a variety of duties, credit analysts make recommendations about individuals/companies that should and should not receive credit and present their findings to management and executives.
  • Obtaining a bachelor’s degree in finance or accounting is common among credit analysts, along with training in data analysis using programs such as Excel.

 

Credit Analyst Job Description

Credit analysis encompasses a variety of important functions. A credit analyst must use the financial data from an individual or company to determine their creditworthiness. It applies to all the various ways that credit may be sought – secured or unsecured loans, refinancing, credit cards, or a line of credit.

Other responsibilities for a credit analysis include:

  • Offering up recommendations associated with an analysis of credit risk
  • Giving presentations of findings – regarding risk and creditworthiness – to managers and company executives
  • Staying abreast of company protocols regarding lending
  • Generating documents and spreadsheets to clearly communicate analysis of financial data, specifically in regard to credit risk and creditworthiness

 

Educational Requirements

In order to qualify for a credit analyst position, an individual typically needs to possess at least a bachelor’s degree, with a major usually in accounting, finance, or a related financial services field.

Whatever the specific degree is, the individual must possess a solid background in mathematics and finance and a working knowledge of how to analyze numbers and data using programs such as Microsoft Excel. Credit analysts must become well acquainted with financial statement and ratio analysis, as well gain as a good working knowledge of both microeconomics and macroeconomics. In the United States, thorough knowledge of the Generally Accepted Accounting Principles (GAAP) and other financial techniques is also crucial.

Credit analysts don’t usually obtain any specific certifications in their field. The absence of certifications distinguishes the position from other jobs in finance or accounting, such as that of Certified Public Accountants (CPAs). Depending on where the credit analyst works or is looking to be hired, it may be desirable or even required, to possess a Master of Business Administration (MBA) degree. They may also seek a certification such as CFI’s Financial Modeling and Valuation Analyst (FMVA) designation.

 

Related Readings

CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ 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:

  • Due Diligence Career Profile
  • Bank Corporate Divisions
  • FICO Score
  • Top Finance Certifications

FMVA certification program

Advance your career in investment banking, private equity, FP&A, treasury, corporate development and other areas of corporate finance.

Get certified as a financial analyst with CFI’s FMVA® Program.