Credit Analysis Job Description

A credit analyst is tasked with assessing the credit worthiness of a borrower.

Credit Analyst Job Description

  • Conduct thorough analysis and assessment of credit requests, including new requests, change requests, refinancing and annual due diligence.
  • Provide recommendations tied to analysis and assessment of credit risk.
  • Present analysis, findings and recommendations to managers, especially findings that involve a borrower’s ability to repay.
  • Keep up to date with company’s lending protocols.
  • Reconcile credit files and identify discrepancies and variances.
  • Develop and prepare spreadsheets and models to support analysis of new and existing credit applications.

Relevant skills, knowledge and experience:

  • Bachelor’s degree in finance, accounting or other business-related field.
  • Two to five year of strong quantitative experience
  • Strong proficiency in MS Office and general computer use
  • Ability to manage competing deadlines in a high-pressure environment, with varying ranges of supervision
  • Strong attention to detail and ability to notice discrepancies in data
  • Impeccable understanding of financial statements, ratios and concepts.

What is credit analysis?

Credit analysis is a very particular area revolving around a firm’s financial risk analysis. The procedure involves evaluating the risks that businesses involved in loan financing are likely to experience by initiating background research on the retailer or commercial customer. In other words, a financier must perform due diligence on rating the credit of the financee.

A credit analyst is responsible for several tasks in the company, which includes providing guidance on credit risks related to lending programs that involve massive amounts of money.

The Credit Analyst is a key contributor to investments which begins when a company has been approved of the security required. Through expert analysis, the process provides supporting evidence of the given sectors that contribute to the decisions involved in asset allocation. A bank, for example, will hire a credit analyst to help assess the different firms and individuals it can offer loans to and, thus, generate return on using their cash assets.

What information do credit analysts use?

The following are just a few types of documents that credit analysts take information from: annual reports, financial statements, profit and loss statements, management accounts and other additional market data reports.

What other factors must be analyzed?

Other critical components in credit analysis, aside from direct analysis of company performance, are:

  • Developing models, both mathematical and statistical ones that directly relate to the risk being measured;
  • Recording anticipated environmental changes;
  • Analyzing periodic market patterns; and,
  • Tracking legislation and policies.

What are the typical credentials of a credit analyst?

A credit analyst will usually have a bachelor’s degree, with a background in finance, accounting or other related fields. These backgrounds are particularly useful in granting the analyst experience in ratio analysis, financial statement analysis, risk assessment and economics. Naturally, a working knowledge of accounting principles and financial techniques also comes in handy.

Unlike accounting and finance, where there are specific certifications for the field, there is no charter for credit analyst. However, some banks or institutions may prefer applicants with a Chartered Financial Analyst (CFA) designation. The CFA covers ratios and financial analysis techniques that are often used in credit analysis. For example, the corporate finance section of the CFA exam will cover topics that are relevant to credit analysis, such as the interest cover ratio or the creation and analysis of a debt schedule.

This job description is inspired by responsibilities outlined by companies like HSBC, JPMorgan Chase and Wells Fargo.

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