Introduction

"The analysis of credit is essential to the maintenance of sound banking practices." - Alan Greenspan

Credit Analyst

A credit analyst is a financial professional who evaluates the creditworthiness of individuals and businesses. They analyse financial information such as credit reports, financial statements, and other data to assess the risk of granting credit.

They may also review loan applications to determine whether applicants have the ability to repay their debts. Credit analysts may work for banks, credit unions, and other financial institutions.

A credit analyst may also be referred to as a:

• credit risk analyst
• credit risk manager
• credit rating analyst
• loan analyst

The duties of a credit analyst may vary in accordance with their seniority, and the types of clients they work with. However, all credit analysts will be expected to:

• Analyse financial statements and credit histories of potential borrowers to assess their creditworthiness.
• Calculate financial ratios to measure borrowers’ creditworthiness.
• Review and analyse credit applications and loan documents.
• Research and assess current economic and market trends as they relate to credit decisions.
• Monitor existing credit portfolios and identify risk factors.
• Prepare credit reports, memos and presentations.
• Make recommendations on loan decisions.
• Establish and maintain relationships with clients.
• Negotiate loan terms, interest rates and repayment plans.
• Stay up to date on credit industry news and regulations.

A credit analyst typically works in an office environment, often in a bank or financial institution. The analyst is responsible for reviewing, analysing, and evaluating credit data to determine the creditworthiness of potential and existing customers. Most of the work is done using a computer, but the analyst may also need to communicate with customers and other stakeholders to discuss credit applications or to provide feedback.

it is possible to be a self-employed credit analyst. In order to become a self-employed credit analyst, you will need to have a solid understanding of credit analysis, financial statements, and business operations. You will also need to have the right qualifications, such as a degree in accounting or finance, as well as some experience in credit analysis. Additionally, you will need to have access to the right tools and resources, such as access to a credit bureau, to perform your job.

Several years’ practical experience is generally required to become a credit analyst. Many employers prefer candidates with a bachelor’s degree in finance and at least two years of experience in a related field such as banking. Additionally, some employers may also require professional certifications such as Chartered Financial Analyst (CFA) or Certified Public Accountant (CPA).

Practical experience to become a credit analyst can be gained through internships, part-time jobs, and entry-level positions at banks, credit unions, and other financial institutions. Many employers offer on-the-job training and mentorship programs to help employees develop their skills as credit analysts. Additionally, attending seminars and workshops related to credit analysis can provide valuable insight into this profession.

Typically, credit analysts need at least a bachelor's degree in finance, accounting, business, economics, or a related field. It is also helpful to have knowledge of financial instruments such as bonds and stocks, as well as experience with financial analysis and risk management.

Membership of a professional association can also help credit analysts build successful careers, which include the following:

• Chartered Institute of Credit Management (CICM) Qualifications
• Association of International Credit and Trade Finance Professionals (AICTP) Qualifications
• Chartered Banker Institute (CBI) Credit Qualification
• Chartered Institute for Securities and Investment (CISI) Credit Risk Qualification
• Credit Management Association (CMA) Qualification
• Financial Conduct Authority (FCA) Credit Risk Certification
• Institute of Credit Management (ICM) Credit Risk Certification
• Institute of Financial Services (IFS) Credit Risk Certification
• Professional Credit Qualification (PCQ)
• Professional Credit Risk Analyst (PCRA)

The career path for a credit analyst typically begins with an entry-level role in banking or finance, such as a credit analyst trainee or credit analyst assistant. Salaries for these positions usually start at around £20,000 and can range up to £30,000 depending on experience and qualifications.

As a credit analyst gains experience, they may be promoted to a senior credit analyst role, which can come with a salary of up to £45,000.

At the highest levels, a credit analyst may become a credit manager, which can come with a salary of up to £70,000. A credit analyst may also choose to become a credit risk manager, which can come with a salary of up to £90,000 or more depending on the company and their experience.

Aspiring and established credit analysts can fast-track their long-term professional development in the following ways:

• Take classes or seminars related to credit analysis.
• Join professional organisations like the Association for Financial Professionals (AFP) or the National Association of Credit Management (NACM).
• Network with other credit analysts to gain insight into best practices and to stay up to date on industry trends.
• Research the latest trends in credit analysis and stay abreast of new developments in the field.
• Read books or industry publications related to credit analysis.
• Attend conferences and events related to credit analysis.
• Participate in webinars and other online learning opportunities.
• Develop a portfolio of case studies and other examples of successful credit analysis projects.
• Utilise social media to follow and interact with other credit analysts.
• Develop relationships with credit bureaus, vendors, and other outside sources.

A credit analyst may choose to branch out into a different specialism, using their highly transferable knowledge and skills to their advantage. For example, a successful credit analyst may seek to become a/an:

• Banking or Financial Services Consultant
• Financial Analyst
• Risk Management Analyst
• Investment Banker
• Financial Planner
• Financial Controller
• Commercial Loan Officer
• Business Development Manager
• Auditing Professional
• Insurance Underwriter
• Credit and Collections Manager
• Mortgage Loan Officer
• Financial Writer/Blogger
• Compliance Analyst
• Investment Advisor
• Business Credit Analyst
• Bank Manager
• Credit Risk Manager

For tenacious and ambitious candidates with excellent numeracy and analytical skills, a career in credit analysis can be highly rewarding.

Just a few of the benefits of pursuing a career as a credit analyst include:

• High Salary: The potential to earn a generous salary plus additional job perks.
• Job Security: Credit analysts are in high demand and the job outlook is expected to remain positive.
• Flexibility: Most credit analyst positions are full-time, but there are also opportunities for part-time and remote work.
• Opportunity to Learn: The opportunity to learn more about financial markets and develop critical business skills.
• Variety: The chance to work in various industries and with different types of customers.
• Networking: The opportunity to meet and collaborate with people in the financial sector.
• Professional Development: Credit analysts can gain valuable experience and knowledge that can be applied to future job opportunities.