There are a variety of credit analyst positions. Credit analysts – in general – are responsible for looking at the backgrounds of individuals and companies applying for loans or other types of credit. They examine financial and personal information about applicants and draw up figures that help them determine whether the applicants are creditworthy. The information is then passed along to the appropriate persons at the lending or financial institution.
Credit analysts are responsible for determining how creditworthy loan applicants are; interns are often tasked with doing the “heavy lifting” that the position entails, collecting the required documents, and passing along the analysis of the data they collect to senior credit analysts.
Commercial credit analysts primarily deal with companies (and sometimes individuals) applying for commercial loans.
Credit risk analysts often deal with individuals/companies applying for commercial loans at credit unions.
Credit Analyst Intern
Many credit analysts start as interns. As is true with almost any other intern position, a credit analyst intern works under a credit analyst, either for a bank or for another financial or lending institution.
Credit analysts need to collect and analyze a sizeable amount of data when it comes to applicants looking for a loan. It includes the applicants’ credit history, bank statements, financial statements (which is specific to companies), and any other information that would lend itself to assessing the applicant’s creditworthiness.
Interns are often tasked – because they are often still learning and are the bottom people on the totem pole – with contacting applicants and spending the time it takes to actually gather all of the data that must be analyzed. In many cases, the interns – in order to both learn and save the more senior analysts time – will crunch the numbers and pass the information along. The senior credit analysts review the information and then provide the findings to the institutions trying to determine if they should provide the applicant with a loan.
Commercial Credit Analyst
A commercial credit analyst deals specifically with applicants looking for commercial loans. In certain cases, these analysts may deal with individuals looking to get a loan on a commercial space. However, in most cases, commercial credit analysts deal with companies looking for commercial loans for one of two main reasons:
The company needs substantial funding in order to expand their organization.
The company needs funding to expand a line of goods or services that they produce or offer.
Commercial credit analysts, when dealing with a company looking for a loan, must look at the company’s history of borrowing, if one exists. They must determine how frequently the company has borrowed funds and how quickly and effectively the company has repaid its debts. They will also examine various financial metrics to assess the overall financial health and soundness of the company.
Credit Risk Analyst
Credit risk analysts focus specifically on the risks involved with providing an applicant a loan. They look at applicants applying for loans at all types of financial institutions and lenders, but they often work extensively with credit unions.
Determining how risky it is to offer an applicant a loan is a crucial part of the credit and risk analyst’s job. Often this involves looking at financial metrics such as a company’s quick ratio to gauge the company’s existing debt situation.
Lenders and financial institutions make a profit from extending a line of credit to an applicant only if the applicant continues to pay off their principal loan amount and are able to cover the interest payments as well. Depending on how risky the loan is, a lender may require it to be a secured loan. It means that the applicant must put up some type of collateral that the lender may take (and sell or use for profit) if the applicant cannot repay his debts.