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Credit Analyst Tasks

The primary tasks and responsibilities of a credit analyst

What are Credit Analyst Tasks?

Credit analyst tasks primarily involve deciding whether individuals and businesses applying for credit (either for personal use or business use) are given credit. Credit analysts help banks and financial institutions allocate credit and manage risk effectively. The specific tasks and responsibilities of a credit analyst depend largely on his level of experience and education.

 

Credit Analyst Tasks

 

Credit analysts make their decisions regarding credit applications based on several factors such as the credit score of the applicant and the reason for the loan. They are employed by commercial banks, investment banks, private equity funds, venture capital funds, investment management firms, insurance companies, rating agencies, and various other financial institutions.

 

Summary:

  • Credit analysts decide whether individuals and businesses applying for credit (either for personal use or business use) are given credit.
  • Credit analysts are employed by commercial banks, investment banks, private equity funds, venture capital funds, investment management firms, insurance companies, rating agencies, and various other financial institutions.
  • Credit analyst tasks involve research, analysis, and presentation.

 

Entry-Level Credit Analysts – Daily Tasks

The daily tasks and responsibilities of an entry-level credit analyst can be broadly classified into three categories: research, analysis, and presentation.

 

1. Research-based tasks

Credit analysts need to gather information about their clients and applicants. Entry-level analysts may need to liaise with clients on a regular basis in order to find and record information relevant to credit allocation. Credit analysts also need to possess a good understanding of the legal structure and especially of how the legal structure affects the credit allocation process.

 

2. Analysis-based tasks

The majority of what entry-level credit analysts do can be classified as analysis-based tasks. They include extensive data analysis, statistical modeling, and building mathematical risk models. Also, entry-level credit analysts must-read financial reports and briefings and carry out sensitivity analysis and what-if analysis. They may also need to help applicants complete credit applications and perform minor clerical activities.

 

3. Presentation-based tasks

Entry-level credit analysts also need to visit and present their work to clients. Most entry-level credit analysts need to create and maintain extensive presentation decks.

 

Experienced Credit Analysts – Daily Tasks

Experienced credit analysts help their companies manage risks related to their lending activities. They ensure that their clients abide by government regulations and don’t take risks that endanger the stability of the larger financial system. In addition, they may serve as advisors and consultants to governments and help shape government policy.

 

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 developing your knowledge base, please explore the additional relevant CFI resources below:

  • 5 Cs of Credit
  • Credit Score Analysis
  • Creditworthiness
  • Senior Credit Analyst Salary