What is a Credit Analysis Certificate?
A credit analysis certificate is a certificate awarded to credit analysts, and it represents the core components of the credit risk training curriculum. The certificate acts as a validation of the training that credit professionals received.
The document can be used to demonstrate the effectiveness of their training through an independent supervised test. The credit analysis certificate can be used by credit analysts during job interviews as a confirmation of their achievements and their readiness for a career in lending.
Before an individual can be awarded a credit analysis certificate, they are required to take and pass an exam. The exam covers various topics such as financial statement analysis, commercial and consumer lending, financial ratios, tax return analysis, market analysis, structuring commercial loans, loan documentation, etc.
The exam may take anywhere from two to five hours, and the participants are required to attain a predetermined minimum score to pass the exam. The areas covered in the exams are determined by subject matter experts such as finance professors, bankers, and industry leaders.
- A credit analysis certificate acts as a tangible confirmation of a credit analyst’s training and readiness for a career in credit analysis.
- A credit analysis certificate can be obtained by undertaking courses offered by industry leaders, professors, and professional associations.
- Most courses require candidates to attain a specific minimum score in order to pass the test and receive a certificate of completion or competency.
Requirements for Credit Analysis Certificates
In order to obtain a certificate in credit analysis, most credit training programs require learners to have a bachelor’s degree in finance, accounting, statistics, economics, or other related disciplines. A degree in any of the mentioned disciplines introduces learners to key credit analysis concepts such as financial statement analysis, ratio analysis, industry analysis, market analysis, etc. In the absence of a bachelor’s degree, some programs may consider participants with an associate degree and related work experience in a financial institution.
Advanced credit programs may require potential participants to have the requisite working experience in the lending department of a financial institution. For example, the Credit Risk Certification offered by the Risk Management Association requires credit professionals to have worked in areas such as credit risk and market risk for at least five years. Such credit programs require participants to have knowledge of subjects such as financial statement analysis, commercial lending, and tax return analysis.
Credit Analysis Online Courses
Throughout the years, online courses have emerged as a popular mode of learning for students seeking a career in credit analysis, as well as professionals working in consumer and commercial lending. Online courses allow unlimited participation of students, in addition to providing traditional course materials, such as readings, filmed lectures, and downloadable resources.
Online credit courses provide user forums where students and professors can interact directly and get immediate responses to questions and assignments. At the end of the online course, learners are awarded a certificate of completion, which participants can use to build their resumes and boost their reputation.
Credit Analysis Certification
Students seeking a career in credit analysis can pursue an industry certification program to gain additional expertise and get a practicing certificate. Industry certifications such as the Credit Risk Certification (CRC) and Credit Business Associate (CBA) equip participants with an additional level of expertise. The certificate awarded at the end of the program confirms mastery of key topics such as risk analysis, cash flow analysis, credit derivatives, and financial statement analysis.
The National Association of Credit Management is one of the main providers of credit certification programs. The association offers six levels of certification, including the Credit Business Associate, Credit Business Fellow, Certified Credit Executive, and Certified Credit and Risk Analyst. The certifications require participants to meet specific educational and professional qualifications before they can enroll in the program.
Roles of Credit Analysts
One of the roles of credit analysts is to evaluate financial statements to determine the level of risk involved in extending credit to a potential borrower. Other types of credit information that are evaluated include past payment history, earnings and savings information, and purchasing activities. The data obtained is used by the analyst to guide their decision and make a recommendation to the credit committee or senior credit analyst.
For example, if the evaluation of the financial health of the corporate borrower reveals a history of default and weak cash flows, the analyst may recommend extending a lower amount of credit at a high interest rate to compensate for the high credit risk. For high levels of risk that the lender cannot accommodate, the credit analyst can recommend rejecting the loan application in its entirety.
The job of a credit analyst involves reviewing and analyzing large volumes of data, which require knowledge of statistics software. The most popular software that analysts are required to be familiar with is Microsoft Excel. The software is required to perform technical calculations such as risk analysis, valuation equations, and financial statement analysis.
Banks may require candidates to exhibit a mastery of common Excel functions and a working knowledge of Microsoft’s spreadsheet program before they can be hired for the credit analyst position. Providing credit analysis certificates during job interviews can help potential candidates validate their professional training and mastery of Excel and increase their chances of getting the job.
CFI is the official provider of the global Certified Banking & Credit Analyst (CBCA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional resources below will be useful: