Credit analysts study the current credit data and financial statements of individuals or firms to determine the degree of risk involved in extending credit or lending money. They use a number of ratios when reviewing a potential borrower and then prepare reports with this credit information, all of which is used to make a decision on whether the financial institution will lend credit to the borrower.
Most credit analyst positions require only a high school diploma to start, since the majority of training is accomplished on the job in both formal and informal training sessions. A bachelor’s degree in finance or economics is often preferred by commercial loan institutions, however, and it could improve your chance of landing a job. Since the work entails studying the credit worthiness of a client, credit analysts need to understand business accounting, financial statements and more.
Credit analysts verify the information on credit applications to determine a client’s creditworthiness. Their task is to figure out whether a borrower will have sufficient cash flow to pay back the line of credit by comparing ratios to industry standards, other borrowers and historical trends. For example, a credit analyst at a bank may analyze a company’s financial statements before providing them a loan for a new warehouse.
On a daily basis, credit analysts:
According to the U.S. Bureau of Labor and Statistics (BLS), the median salary for a credit analyst is $57,470 with the top 10% earning up to $112,710. BLS projects employment to grow much faster than average between the years of 2008-2018.