The main responsibility of a credit analyst is to examine an individual's or company's creditworthiness. Credit analysts collect all the financial information from customers, such as earnings and repayment history, to make evaluation of their ability to meet various financial obligations.
A borrower's previous financial and credit history is examined by a credit analyst to determine their financial health and ability to repay the credit extended by a lender. Commercial and investment banks as well as private equity firms typically hire credit analysts.
To assess a borrower's financial health, the credit analyst collects and analyses important financial information using financial ratios. Their cash flow analysis is based on industry benchmarks to determine if borrowers cash flow is sufficient to repay.
After reviewing company lending policies and credit analyst recommendations, the underwriter decides whether or not to credit to a customer.
Consumer credit analyst- the main work of a consumer analyst is to evaluate the financial condition of a person or a company.
Corporate credit analyst- the corporate credit analyst examines the credit risk of a non financial firm, such as trading firms, manufacturing enterprises, and so on.
Financial institution- they do analysis of financial institutions that are related to multiple transactions as counterparty risk.
Sovereign or municipal- They are mostly trained to rate agencies that give sovereign credit rating and analyse a nation on the basis of tax collection, government spending, fiscal deficit, etc.
Credit investment analyst- They analyse fixed income securities that are issued by various governments, for example- corporate bonds issued by corporate firms.
The career of a credit analyst starts with a position of a junior analyst after getting the degree in accounting finance or any other business related field along with quantitative and ethical focus. Some of the roles deal with consumer credit examination. In some companies, the senior-most analyst oversees a team handling common analysis for a particular market, region or company.
If you become a top-performing analyst, you can rise into financial management positions after overseeing analytical departments, making final credit decisions and monitoring departmental performances as well.
Strengths and weaknesses of a credit analyst are questioned in each step. Be ready to answer them honestly and you'll get closer to the promotions. There are various benefits of being a Credit analyst that are so much in demand in a huge range of businesses also in addition to banks and credit rating agencies as well. Retail store chains, auto manufacturers and utilities and energy companies also extend credit to their customers and hire some credit analysts to help them do what they do the best.
The job of a credit analyst can be a great pathway to a career as a portfolio manager, investment banker or even a loan and trust manager.
Being a credit analyst is not very easy, you require some of the significant skills in order to pursue this job role in a very respected industry or a business.
Here are some of the essential skills required in credit analysts-
Thus, if you want to be a Credit analyst you are required to pay attention while conducting a review of the client's financial documentations and it will help you discover critical errors and omissions.
The work of a credit analyst is really stressful. It can really affect your mental health because once you become a Credit analyst you will have to deal with multiple projects with even short deadlines. Sometimes the work stress can lead to compromising patients with the quality of work. As mentioned above, the work routine of a credit analyst also contains taking urgent projects along with the multiple clients altogether.
If you are a more experienced credit analyst then you may experience even harder time dealing with all these projects at the same time.
It is not possible to enter this field if you have zero knowledge about software required in working as a Credit analyst. But there is a positive sign that even inexperienced credit analysts go for formal training. You can get the skills through on the job training and guidance from the other credit analysts of the company.
Another very major limitation of this field is that even a small mistake can cost big amounts. If you are not someone who is good at analysing and re-revising your work, then you should try seeking proper training from the best experts who are experienced in this field for a very long time.
If you miss an error or a fraud, it can affect the lending process and the lender will be at utmost risk of losing his funds.
With limitations comes the important benefits. Every field has a limitation but what makes them exceptional is the more benefits that come hand-in-hand. There are strengths and weaknesses of a credit analyst that also go hand-in-hand. The work environment here will make you work stronger and overcome every obstacle.
The first and the most important benefit of credit analysis is the salary package given to them. According to a survey by Salary.com, a Credit analyst with a bachelor's degree gets between $44k and $55k. Amount is pretty solid and it keeps increasing according to the promotions and role switches.
If you are a Credit analyst, trust us your degree can lead you to higher and more exciting career paths in the finance sector. There are times when credit Analysts are assigned to work with brands and companies that operate in a particular industry and in this way they get a great understanding of the ins and outs of that industry. It becomes so amazing to work in a positive environment where you get to know so many things about the companies or firms of a particular industry.
Your career progression can also be driven by your performance acquisition and experience of the significant professional qualifications. Employees who have consistently high levels of performance experience may get eligible for promotion every two or three years.
After you reach the top level of the career, you might be working as a senior manager or a managing director. Credit analyst job roles go from the front end roles to investment managers and traders.
Top Companies offering the role of credit analyst-
These three are the brilliant companies where you can apply for the role of credit analyst. Make sure to mention each and every skill of yours to enhance your chances of being selected as a top credit analyst.
The job role of a credit analyst has a wider scope than you can imagine right now. Most of the top companies globally are offering the roles of credit analyst and with a good package. Everyone is now focusing on the finance part and studying this field. Students are also opting Finance as their career option and thus, the role of a credit analyst is the topmost with the surprisingly interesting work environment.
Do not forget that there are various strengths and weaknesses of credit analysts. You have to study them and seek better guidance from someone who's experienced enough. In a company as a credit analyst, it is so important to be aware of your strengths and weaknesses.