What is a Credit Analyst?

credit analyst

With the economy growing as it has been the past couple of years, banks have been busy offering customers various credit options. Credit analysts have an important role in the finance industry as one of their main jobs is to determine the creditworthiness of customers. If they make correct decisions, the bank gets more customers and makes money. Incorrect decisions can cost the institution money. Here is an overview of credit analysts, including what they do and how to become one.

What is a Credit Analyst?

Credit analysts are trained professionals who obtain credit and financial information from customers seeking credit and financing. The credit analyst analyzes data and prepares reports for individuals or businesses to help them determine if a customer is a good credit risk. When a consumer applies for a credit card or a loan from an institution, the institution provides the information to credit analysts. This information may be:

  • the applicant’s wages debts
  • pay history
  • savings
  • buying activity

Generally, credit analysts use any information involving the customer’s financial status to help them make an accurate decision.

The credit analysts look over the information and analyze the data. They then advise the institution if the applicant is a good risk for the company and if they should give financing to the customer. They typically work for commercial and investment banks and lending institutions. They also work for other businesses that deal with finances. Credit analysts also analyze and determine the creditworthiness of securities and similar financial options.

How to Become a Credit Analyst

To become a credit analyst, an individual must have a degree. An associate degree in finance, statistics or mathematics may be sufficient to be hired as a credit analyst. Most employers prefer their analysts have a bachelor’s degree and some work experience in this field. Candidates with bachelor’s degree often major in:

  • finance
  • accounting
  • or statistics

They specialize in areas like:

  • risk assessment
  • financial statement analysis
  • ratio analysis
  • accounting
  • economics or a similar area

The more financial courses the candidate takes, the more he or she will learn about this business. Once the individual has obtained some experience working as an analyst, he or she can obtain the Credit Risk Certification.

Related Resource: 30 Best Online Bachelor’s in Finance Programs

Career Outlook

Credit analysts have the potential to earn very good wages. Wages can vary from one city to another and even from one financial institution to another. As of May 2017, credit analysts earned annual wages ranging from $42,010 to $140,880 with the average wage at $82,900. This is according to a U.S. Bureau of Labor Statistics report.

The top five highest paying states for credit analysts to work are:

  • New York
  • District of Columbia
  • California
  • Connecticut
  • New Jersey

Credit analysts are also categorized as financial analysts.  These professionals are expected to see job growth of 11 percent between 2016 and 2026.

Individuals who enjoy working with money or are seeking careers in the finance industry may find working as credit analysts to be very challenging and rewarding. Credit analysts have the potential to have very good career opportunities as our economy continues to grow and people continue to borrow money for large purchases.

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