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The job of a credit analyst is to review financial statements and credit data to determine the likelihood that a loan will be paid back in full. The financial data may include sufficient cash flow, comparing ratios to industry standards, comparison against other borrowers, and the borrower’s financial history. The borrower could be one individual or a business; either way, credit analysts must have the ability to decide if the potential borrower will be able to meet their financial obligations.
While the main responsibility of credit analysts is to determine the degree of risk involved in lending money or extending credit to borrowers, they are also accountable for a few other tasks. Within the borrower analyzation process, these professionals must understand how to use financial ratios and computer programs. After analyzation, reports need to be prepared that outline the degree of risk for customers.
A comparability process must also be used to measure the liquidity, credit history and profitability of one borrower against another, to learn about patterns in certain industries and geographic locations.
Credit analysts also need to communicate with credit associations, business representatives and loan committees to exchange credit information and complete loan applications.
Some of the technology credit analysts use include:
• Content workflow software such as Equifax Application Engine or Experian Transact SM
• Analytic/scientific software such as FinEng Solutions and SAS software
• Structured query language
• SAP software
• Financial analysis software such as Fair Isaac Capstone Decision Manager, Experian Credinomics, Experian FraudShield, etc.
• Office Suite software
• Information retrieval/search software such as CGI-AMS BureauLink Enterprise
Employment of credit analysts is projected to grow at 8 to 14 percent by 2022. While most credit analysts work for banks and other financial institutions, they also work in the financial departments of insurance companies, automotive services or telecommunications industries. The top industries are finance and insurance, as well as management of companies and enterprises.
Some of the positions similar to this career are personal financial advisors, budget analysts, accountants and insurance underwriters.
The median annual salary reported by the Bureau of Labor Statistics is $75,970. Those in the 90th percentile earn $126,050. The annual mean wage is highest in the following industries: securities and commodity contracts intermediation and brokerage, monetary authorities-central bank and software publishers.
The majority of professionals in this field have earned at least a bachelor’s degree in accounting or business. Certification to become a designated Credit Business Associate is also available from the National Association of Credit Management. While this certification is not mandatory, it may be helpful during a job search. The certification exam is available to those who have completed three college-level courses in financial statements, business credit and financial accounting.