what is a credit analyst?

As a credit analyst, you assess risk factors associated with loans to companies and individuals. You gather large amounts of information, compile financial records and review them. You make recommendations on whether to give loans to individuals or a business. You also prepare reports to be used by banks to make decisions. Aside from assessing the financial records, you determine the creditworthiness of an individual or company. You evaluate a borrower's financial and credit history to establish the economic health and ability to repay the lender.

Credit analysts work for financial institutions that lend money. You are employed by credit rating agencies, credit card companies, investment and commercial banks. Some credit analysts work for building societies and other credit facilities tied to specific professions. For instance, manufacturers and workers in the mining industry may have credit facilities for their employees.

 

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average credit analyst salary

As a credit analyst, you earn an average remuneration package of $78,000 per year. In an entry-level or junior position, you take home a salary of $70,000 annually. With experience, your earnings increase to $85,000 per year. The remuneration package fluctuates depending on various factors.

what factors affect the salary of a credit analyst?

The salary of a credit analyst depends on experience and educational qualifications. You handle simple company tasks with minimal academic qualifications and expertise, reducing your earnings. You can negotiate a higher salary when you gain expert knowledge in a specific industry.

The location and company size also influence your earnings. When you work in metro areas, you are likely to earn more than credit analysts working in smaller cities. The demand for credit analysts in metro areas increases your earning potential. Large financial institutions also pay higher remuneration due to the unlimited resources at their disposal. When you work in a large organisation, you perform complex duties, boosting your earning potential. Working in a small company limits your earnings since they have limited resources and need help paying higher salaries.

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types of credit analysts

Some of the types of credit analysts include:

  • consumer credit analysts: as a consumer credit analyst, you examine an individual's risk factors and financial condition to determine their eligibility for a loan. You gather critical information to help you assess creditworthiness like past credit history, investments, assets and salary.
  • corporate credit analysts: as a corporate credit analyst, you evaluate the credit risk of lending money to industrial companies, trading firms and manufacturing enterprises. As a corporate credit analyst, you are skilled in a specific industry. You can analyse the company's ability to pay the loan based on the sector and products they sell. You are well versed in accounting techniques to understand businesses' financial statements and performan
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working as a credit analyst

If you are good with numbers and are interested in becoming a credit analyst, explore the duties, responsibilities and work environments of credit analysts.

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education and skills

There are no academic requirements for becoming a credit analyst. Still, most employers hire candidates with qualifications in a related field. Some of the qualifications you can pursue include:

  • bachelor’s degree: pursue a qualification in finance or accounting, like a three-year course, like a bachelor of finance. To join the bachelor's degree program, complete Year 12. It would be best to consider completing a postgraduate study like a master's in finance.
  • certifications: consider completing a Chartered Financial Analyst (CFA) program to improve your career options. You should also gain experience through entry-level roles in the banking sector. 

credit analyst skills and competencies

Some of the skills you require to work as a credit analyst include:

  • accounting skills: as a credit analyst, you rely on accounting skills like balancing ledgers and creating financial statements to understand a borrower's financial position. You develop financial statements and ratios to review creditworthiness.
  • industry knowledge: As a credit analyst responsible for assessing loan applications for companies and businesses, it is important to have a solid understanding of the specific industry in which the business operates. Each industry has its own unique methods for assessing a company's financial position, and being familiar with these methods will enable you to create accurate reports and make well-informed decisions.
  • communication skills: As a credit analyst, a crucial aspect of your job is to create financial reports and deliver them to stakeholders. Effective verbal and written communication skills are essential to succeed in this role. Strong writing skills are necessary to prepare accurate reports, while communication skills come in handy when explaining complex concepts and interacting with colleagues.
  • problem-solving skills: as a credit analyst, you help clients meet their financial objectives. Your task requires resourcefulness and analytical skills to solve customers' financial problems. Having problem-solving skills also helps you resolve issues in the company and reduce business risks.
  • attention to detail: as a credit analyst, you handle huge volumes of information. For instance, you review the personal background and financial data of clients. Since you handle sensitive data, you pay attention to details when evaluating the information for loan approval.
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FAQs about working as a credit analyst

Here, you will find the answers to the most frequently asked questions about the profession of a credit analyst.

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