Career Development

What Does a Credit Analyst Do?

Find out what a credit analyst does, how to get this job, and what it takes to succeed as a credit analyst.

Credit analysts are responsible for analyzing and evaluating the creditworthiness of individuals or businesses. They look at factors like income, assets, debts, and other financial obligations to determine whether someone is likely to repay a loan on time. Credit analysts may also be tasked with recommending which loans should be approved and which ones should be denied.

Credit analysts work in a variety of industries, including banking, finance, insurance, real estate, and retail. Their job is to ensure that their company makes sound financial decisions when it comes to lending money.

Credit Analyst Job Duties

Credit analysts typically have a wide range of responsibilities, including:

  • Reviewing financial statements and other documents to determine whether they accurately reflect the company’s financial situation
  • Analyzing financial information to identify potential risks or opportunities for profit in order to make recommendations to senior management on business decisions
  • Investigating unusual activity in order to detect fraud or other irregularities, such as embezzlement
  • Monitoring credit risk exposure by analyzing changes in a client’s business model, market conditions, or regulatory requirements
  • Reviewing a company’s debt structure to determine whether it is stable or risky
  • Managing relationships with banks and other lenders to ensure that debts are repaid on time
  • Reviewing loan applications to determine whether applicants meet eligibility requirements
  • Coordinating with other departments within the company to facilitate loan closing
  • Preparing reports that detail the findings of the investigation, including documentation such as emails, phone records, and bank statements

Credit Analyst Salary & Outlook

Credit analysts’ salaries vary depending on their level of education, years of experience, and the size and industry of the company. They may also earn additional compensation in the form of bonuses.

  • Median Annual Salary: $62,500 ($30.05/hour)
  • Top 10% Annual Salary: $112,000 ($53.85/hour)

The employment of credit analysts is expected to decline over the next decade.

The continued growth in electronic banking and alternative forms of lending, such as peer-to-peer lending, may reduce the demand for credit analysts. As more consumers apply for loans online, fewer will need help from a credit analyst.

Credit Analyst Job Requirements

A credit analyst typically needs to have the following qualifications:

Education: Credit analysts are typically required to have a bachelor’s degree in finance, accounting or a related field. These programs provide students with the analytical skills and knowledge they need to perform their job duties.

Training & Experience: Credit analysts typically receive on-the-job training when they start a new position. This training may last for a few weeks and may include shadowing current credit analysts or other company employees. Training may include learning the company’s specific software and processes for assessing creditworthiness.

Certifications & Licenses: Industry certifications add validity to your qualifications and let current and future employers know that you’re a competent and trustworthy professional. There are dozens of certification programs that credit analysts can take to gain advanced knowledge of their career possibilities and job duties and test their professional skills.

Credit Analyst Skills

Credit analysts need the following skills in order to be successful:

Accounting skills: Accounting skills are essential for credit analysts, as they are responsible for analyzing financial data. Credit analysts should have a basic understanding of accounting principles and practices to be able to interpret financial statements and other financial documents.

Analytical skills: Analytical skills are the ability to interpret data and draw conclusions from it. This is an important skill for a credit analyst because they need to be able to read financial statements and other documents and determine if a client is a good investment for a company.

Communication skills: Communication skills are essential for credit analysts, as they often need to communicate with clients, other members of the finance team and other professionals. They also need to communicate complex financial information in a way that is easy to understand.

Problem-solving skills: Credit analysts often work with clients to find solutions to financial problems. They may help clients find ways to pay off debt or find ways to save money. Problem-solving skills can help credit analysts find solutions to complex financial problems.

Industry knowledge: Credit analysts need to be knowledgeable about the industry they work in. This means knowing the current trends, challenges and opportunities in the industry. This can help them make better decisions and provide more useful information to their employers.

Credit Analyst Work Environment

Credit analysts work in the credit department of banks, savings and loan associations, credit unions, and other lending institutions. They also work in the credit departments of large corporations that extend credit to their customers. Most credit analysts work regular business hours, although they may occasionally work overtime to meet deadlines. Credit analysts typically work in well-lit and ventilated offices. They may sit for long periods of time while reviewing credit applications and financial statements and writing reports.

Credit Analyst Trends

Here are three trends influencing how credit analysts work. Credit analysts will need to stay up-to-date on these developments to keep their skills relevant and maintain a competitive advantage in the workplace.

The Use of Artificial Intelligence in Credit Analysis

The use of artificial intelligence (AI) in credit analysis is a trend that is quickly gaining popularity among financial institutions. AI can be used to automate many of the tasks that are traditionally done by credit analysts, such as data entry and credit scoring.

This trend presents an opportunity for credit analysts who are interested in developing their skills in AI-based credit analysis. By doing so, they can become more valuable assets to financial institutions and help them to stay ahead of the competition.

Greater Focus on Data Security

As businesses become more reliant on digital technologies, the need for data security has become increasingly important. This is because hackers are becoming more sophisticated and are able to find new ways to break into systems and steal data.

Credit analysts are in a unique position to take advantage of this trend, as they are responsible for ensuring that sensitive customer data is protected. By learning how to identify potential vulnerabilities in systems and develop strategies to mitigate them, credit analysts can ensure that their company’s data remains safe from hackers.

More Collaboration Between Finance and IT

The trend of collaboration between finance and IT is becoming increasingly common in today’s business world. This is due to the fact that both departments have a lot to offer each other; for example, finance can provide IT with financial data that can be used to make better decisions about where to invest resources, while IT can provide finance with the tools and support they need to manage their data effectively.

As this trend continues to grow, credit analysts will need to learn how to work with both departments in order to get the most out of their data. This requires a deep understanding of both sides of the equation and the ability to communicate effectively with both parties.

How to Become a Credit Analyst

A career as a credit analyst can be very rewarding. It offers the opportunity to work in a variety of industries and with many different types of customers. You’ll also have the chance to make a real difference in people’s lives by helping them get the credit they need to buy homes, cars, and other big-ticket items.

To become a credit analyst, you’ll need to have a strong understanding of math and accounting. You’ll also need to be able to think critically and be able to solve problems creatively. Communication skills are also important, as you’ll need to be able to explain complex financial concepts to non-experts.

Advancement Prospects

Credit analysts typically start their careers in entry-level positions, such as credit analyst trainee or credit analyst assistant. With experience and on-the-job training, they can advance to senior credit analyst or credit manager positions. Some credit analysts may eventually become loan officers or loan underwriters.

Credit Analyst Job Description Example

At [CompanyX], we’re looking for a detail-oriented and analytical thinker to join our credit analyst team. As a credit analyst, you will be responsible for assessing the creditworthiness of our potential and existing customers. You will analyze financial statements and credit reports, and use your findings to make recommendations to the credit committee. The ideal candidate will have experience in credit analysis and underwriting, and will be able to work independently to make sound decisions. If you are a motivated self-starter with strong attention to detail, we want you on our team!

Duties & Responsibilities

  • Analyze financial statements, tax returns, and other information to assess creditworthiness of individuals or organizations
  • Prepare reports that summarize findings and make recommendations regarding approval or denial of credit
  • Review applications for new accounts and existing account renewals
  • Analyze trends in credit data and financial statements to identify potential risks
  • Monitor changes in an applicant’s or borrower’s credit report
  • Research an applicant’s or borrower’s credit history
  • Evaluate an applicant’s or borrower’s current debt obligations
  • Determine the maximum amount of credit to extend to an applicant or borrower
  • Recommend whether to approve or deny an application for credit
  • Calculate an applicant’s or borrower’s debt-to-income ratio
  • Review an applicant’s or borrower’s employment history
  • Examine an applicant’s or borrower’s assets and liabilities

Required Skills and Qualifications

  • Bachelor’s degree in business, accounting, finance, or related field
  • 3-5 years professional experience in credit analysis or a related role
  • Strong analytical skills with the ability to identify trends and risks
  • Excellent written and verbal communication skills
  • Proficient in Microsoft Office, with aptitude to learn new software and systems
  • Ability to work independently and as part of a team

Preferred Skills and Qualifications

  • MBA or other advanced degree
  • Experience in the banking or financial services industry
  • Working knowledge of statistical analysis software (SAS, SPSS, R, etc.)
  • Familiarity with Basel III regulations
  • CFA or other professional designation

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