What are the Types of Credit Certifications?
Credit professionals often work to obtain different types of credit certifications to boost their job prospects and chances of getting a promotion at work. Financial institutions, credit bureaus, and investment banks employ credit professionals, such as credit analysts and credit managers, and getting a credit certification provides an additional level of expertise.
Credit certifications equip learners with essential skills, such as financial statement analysis, risk assessment, business plan evaluation, etc., which helps credit professionals perform their functions more effectively. Most intermediate and senior positions may require potential candidates to possess specific credit certifications, alongside a bachelor’s degree and relevant work experience.
- Obtaining credit certifications allows credit professionals to boost their credentials in their specific fields and increase their job prospects and industry reputation.
- The main types of credit certifications include the Credit Risk Certification (CRC), Credit Business Associate (CBA), Credit Business Fellow (CBF), and Certified Credit Executive (CCE).
- Most of the certifications require candidates to have extensive work experience and educational background.
Examples of Credit Certifications
The following are the main types of credit certifications:
Credit Risk Certification (CRC)
The Credit Risk Certification (CRC) is a designation that the Risk Management Association (RMA) started in 2002. In order to obtain the CRC designation, individuals are required to have at least five years of experience in commercial credit and lending, have passed the 126-question credit risk certification, and are active members of the RMA.
Ideally, the CRC designation is recommended for professionals who work in areas of credit risk, operation risk, and market risk and meet the basic requirements of enrolling in the course. Successful applicants get the right to add the CRC designation to their name, which improves their industry reputation, job prospects, and even chances of promotion at work.
In order to obtain CRC designation, applicants are required to complete 45 units of continuing education activities, including courses and attending professional events organized by the RMA, every three years. Applicants must pass the five-hour multiple-question CRC exam. They should also be familiar with financial statement analysis, financial accounting, commercial credit, and tax return analysis.
The RMA recommends that learners should undertake 40 to 80 hours of study and a five-hour practice exam to prepare for the 126 multiple-choice CRC exam. Learns have the option of sitting for the online exam in the spring or in the fall. The exam covers several important areas of credit risk assessment, which include:
- Accurately assessing the client’s industry and market condition
- Evaluating the management’s ability to formulate and implement business strategies
- Completing an ongoing assessment of the client
- Assessing the strength of the client’s cash flows
- Periodically evaluating the value of the collateral
- Identifying sources of repayment
- Detecting and finding solutions to problem loans
Credit Business Associate (CBA)
The Credit Business Associate (CBA) certification is administered by the National Association of Credit Management (NACM). The CBA designation does not require applicants to have work experience in the credit industry, and it is an ideal option for college graduates.
However, applicants are required to have an educational background in finance. Learners who register for CBA certification are required to complete three main courses, i.e., financial statement analysis, business credit principles, and financial accounting. Applicants are required to complete the three courses as part of the program.
CBA applicants are required to sit for a three-hour exam, which consists of 125 to 150 multiple choice questions and true/false type of questions. During the exam, learners are allowed to use calculators to compute figures when preparing financial statements.
Applicants are required to get a minimum score of 70% in the CBA exam in order to obtain the certification. Individuals can take the exam three times per year (May, July, and November) in the NACM affiliate offices, or once during the NACM Credit Congress.
Credit Business Fellow (CBF)
The Credit Business Fellow (CBF) certification is offered by the National Association of Credit Management (NACM). The CBF certification requires applicants to have passed the Certified Business Associate certification offered by NACM. The certification also requires applicants to have the requisite work experience and further coursework.
Individuals who have completed this certification are considered to be experts in credit risk assessment, credit law, business law, and financial statement interpretation. Apart from completing the relevant coursework, applicants are required to provide proof of 75 NACM career roadmap points.
Only applicants who have met the prep courses are allowed to take the CBF exam, and the approval is granted by the NACM. Approved applicants are required to sit for the three-hour CBF exam, which covers multiple topics, including credit risk assessment, credit law, business law, and financial statement interpretation. Applicants must obtain a minimum score of 70% or higher in the exam.
Certified Credit Executive (CCE)
The CCE is the executive-level designation that allows applicants to manage the credit function at the highest level of management. Candidates are required to pass a three-hour rigorous exam that is divided into two sections.
The first section comprises short answer questions and essay questions. The second section comprises a case study question that tests the applicant’s problem-solving skills. Each section carries 50 marks, and candidates are required to earn a minimum score of 70%. The exam covers multiple topics, including law, management, domestic and international credit concepts, accounting, and finance.
Eligibility for the CCE certification requires applicants to have a combination of work experience and educational qualifications. Applicants are required to satisfy four eligibility criteria, and an applicant must meet one of the criteria to be allowed into the course.
The first option requires applicants to have ten years of experience in credit management and 125 career roadmap points. The second option requires applicants to have completed the CBA and CBF certifications and have earned 125 career road map points.
The third option requires applicants to have 15 years of work experience and 125 career roadmap points. Applicants must also be 57 years or older. The final option requires applicants enrolled in Graduate School in the Credit and Financial Management program to have completed the second year.
CFI is the official provider of the Certified Banking & Credit Analyst (CBCA)™ certification program, designed to transform anyone into a world-class financial analyst.
In order to help you become a world-class financial analyst and advance your career to your fullest potential, these additional resources will be very helpful: