what is a credit analyst?
A credit analyst is a financial expert who assesses the creditworthiness of individuals, companies, or securities. They play a crucial role in managing the lending processes of banks and financial institutions.
As a credit analyst, your role is to assess risk factors associated with loans to companies and individuals. You gather and review a vast amount of information, including financial records, to make recommendations about loan approvals. You prepare reports used by banks to inform their lending decisions. Additionally, you evaluate borrowers' creditworthiness by assessing their financial and credit history and determining their ability to repay the lender.
Your responsibilities include developing credit risk models, analyzing financial statements, and evaluating credit history. You work closely with clients to understand their financial status and make recommendations on loan approvals or rejections. A credit analyst maintains documentation of all financial analysis reports, tracks credit portfolios, and stays updated on financial markets and investment opportunities.
Credit analysts mostly work for financial institutions that lend money. Credit rating agencies, credit card companies, and investment or commercial banks are your typical employers. 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.
view jobs near youaverage credit analyst salary
According to the Bureau of Labor Statistics (BLS) survey, the average annual wage for credit analysts is approximately $92,180 or $44.32 per hour, and the median annual salary is $78,850. This median value indicates that half of the credit analysts earned more than this amount, and the other half earned less. The wage percentiles provide a broader perspective with the lowest 10th percentile earning around $47,960 annually, and those in the highest 90th percentile earning as much as $161,800 annually.
The BLS data also sheds light on factors that affect credit analyst salaries. For instance, experience and education are two key determinants that influence the pay scale for a credit analyst. Candidates with an advanced degree, such as a Master's in Business Administration (MBA) or a Chartered Financial Analyst (CFA) certification, may receive higher compensation compared to those with only a bachelor's degree.
The industry sector in which credit analysts work plays a vital role in their salary. Those working in securities, commodity contracts, and other financial investment and related activities earn an average annual salary of $139,570. On the other hand, those who work in the nondepository credit intermediation sector earn an average of $87,280 annually.
Location plays another significant role in determining the salary for credit analysts. According to the BLS, the highest-paying states for this occupation include New York, Virginia, and Rhode Island with annual mean wages of $139,170, $103,480, and $101,060 respectively. Those in South Dakota only expect an average annual salary of $69,360.
The company's size and financial health may also affect the salary of a credit analyst. Larger companies or those with strong financial standings may offer higher salaries compared to smaller or struggling companies. Furthermore, job titles or levels within a company also impact compensation with senior-level credit analysts earning more than entry-level positions.
Wondering what you can earn as a credit analyst? Find out immediately with the Randstad salary checker! You can quickly and easily see what the average salary of a credit analyst is.
types of credit analyst
Credit analysts are key figures in various sectors, each demanding a unique set of skills and knowledge:
- credit intermediation and related activities: In this sector, credit analysts focus on banking and financial institutions. Their primary role involves evaluating the creditworthiness of individuals and businesses applying for loans, and ensuring that companies make lending decisions on a sound financial basis.
- nondepository credit intermediation: Here, analysts work with organizations like credit unions and mortgage companies. They assess the risk associated with lending to consumers and businesses, where the primary focus is on loans and credit facilities not traditionally associated with deposit-taking institutions.
- management of companies and enterprises: In this corporate environment, credit analysts evaluate the financial health and stability of businesses. They play a critical role in decisions related to extending credit to other companies and assessing the risks involved in corporate transactions and investments.
- securities, commodity contracts, and other financial investments and related activities: Analysts in this sector focus on investments, analyzing the credit risk associated with securities and commodities. Their work is crucial for informing investment decisions, managing portfolios, and understanding market trends.
- merchant wholesalers and durable goods: In this industry, credit analysts assess the creditworthiness of clients purchasing wholesale durable goods. Their analysis helps to mitigate financial risks associated with large-scale transactions and credit terms extended to buyers in the wholesale market.
working as a credit analyst
If you are good with numbers and would like to find out more about becoming a credit analyst, explore the duties, responsibilities, and work environments of credit analysts.
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credit analyst job description
As a credit analyst, your role involves assessing the risk of lending to companies or individuals. Your daily tasks involve reviewing credit history, income sources, and purchase activities. Based on your analysis, you provide recommendations to financial institutions regarding whether to accept or reject applications.
Your responsibilities include analyzing clients' financial data for credit unions. This involves evaluating assets, liabilities, and earning history to determine their suitability for credit. When analyzing companies, you review audited annual reports, management accounts, and financial statements.
You are in charge of reviewing borrowers' repayment history and earnings to determine new credit limits. You gather relevant financial data and create a report about whether to decrease or increase their credit limits.
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work environment
Credit analysts work in a fast-paced office environment, primarily reviewing loan applications and generating financial data. While it is a desk job, they occasionally visit clients at their workplaces or homes. There may also be offsite meetings and workshops that require travel. Some companies offer work-from-home options for credit analysts.
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who are your colleagues?
Your colleagues may vary depending on your employer and industry. They may include mortgage brokers, underwriters, staff accountants, financial advisors, finance managers, financial assistants, loan processors, and financial accountants. You may also need to collaborate with auditors, finance analysts, finance business partners, collections managers, and financial planners.
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work schedule
Credit analysts typically work from 9:00 a.m. to 5:00 p.m., totaling 35 to 40 hours a week in a full-time position. Occasionally, you need to attend evening meetings or events, and there may be times when you have to work evenings or weekends for important client functions or company events. Part-time work opportunities are also available, in addition to full-time positions.
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job outlook for credit analysts
Credit analysts have diverse career opportunities for progression and specialization. For example, they have the chance to specialize in working for building societies and mortgage loan providers. Some credit analysts focus on corporate loans or individual loans. Additionally, there are ample opportunities for career advancement in the finance sector.
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benefits of working for randstad as a credit analyst
Working through Randstad offers you a range of benefits:
- being paid weekly
- flexibility
- always a contact person you can fall back on and ask for help from
- many training opportunities
- a range of jobs in your area
Want a permanent contract? But you wonder why it would be interesting for you to work with a staffing company? A temporary job as a credit analyst is often a stepping stone to an attractive permanent job. Every year, thousands of people earn a permanent contract with great employers thanks to a temporary job found through Randstad. What's more, many companies recruit their permanent employees through Randstad too!
credit analyst skills and education
Credit analysts typically require a bachelor's degree in finance, accounting, or a related field. This educational foundation imparts essential knowledge for risk assessment, including topics like statistics, economics, ratio analysis, calculus, industry assessment, and financial statement analysis.
Aside from formal education, a credit analyst usually requires training in risk assessment and professional development. Most employers provide on-the-job training to help credit analysts on their company's loan policies and procedures, industry regulations, and federal laws governing financial transactions.
However, if you acquire certifications or join professional organizations, you can gain a competitive edge and demonstrate your commitment to continuous learning in this field. By showing prospective employers that you're dedicated to upholding the highest standards of excellence, you have the opportunity to skip entry-level positions and advance quickly in your career.
Some of the most common certifications for credit analysts include the Certified Credit Professional (CCP) certification by the American Association for Investment and Financial Management (AAIFM); the Certified International Credit Professional (CICP) certification awarded by the National Association of Credit Management (NACM); and the Certified Risk Analyst (CRA) awarded by the Global Academy of Finance and Management (GAFM).
skills and competencies
- logic and reasoning to evaluate strengths and weaknesses of alternative solutions, conclusions, or approaches to problems
- accounting skills including balancing ledgers, creating financial statements, and developing financial statements and ratios
- solid understanding of your sector and the financial industry
- familiarity with laws, legal codes, court procedures, precedents, government regulations, executive orders, agency rules, and the democratic political process
- knowledge of administrative and office procedures and systems such as word processing, managing files and records, stenography and transcription, designing forms, and workplace terminology
- understanding of the implications of new information for both current and future problem-solving and decision-making
- strong analytical and critical thinking skills that allow you to identify potential financial risks
- good communication skills, both written and oral, to convey complex financial concepts clearly to a wide range of audiences
- ability to work independently with minimal supervision while also functioning effectively as part of a team when necessary
- proven track record of meeting tight deadlines and managing multiple projects simultaneously
- creative problem-solving skills to find innovative solutions to financial challenges
- ability to adapt quickly to changing situations and priorities
- excellent organizational skills with a keen attention to detail
- proficiency in using various computer programs, such as Equifax Application Engine, Experian Transact SM, Microsoft SQL Server, and Microsoft Suite
- ability to explain complex information clearly and concisely
- exceptional listening skills
- unbiased assessment of the performance of oneself, others, or organizations to make improvements or take corrective action
FAQs about working as a credit analyst
Here you will find answers to the most frequently asked questions about credit analysts.
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are credit analysts and financial risk analysts the same?
No, they have different roles. Credit analysts assess borrowers' creditworthiness before approving loans or credit. On the other hand, financial risk analysts evaluate potential risks and suggest strategies to minimize them for a company. They may have overlapping skills, but their focus and responsibilities differ.
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can a credit analyst also be a credit counselor?
Credit analysts and credit counselors have distinct roles. Credit counselors help individuals in creating budgets, managing debt, and improving credit scores. They also offer financial education and resources. On the other hand, credit analysts evaluate credit risk for banking or loan institutions and make decisions regarding extending credit to individuals or organizations. Their primary focus is on the benefits of their employers and not the individuals or companies they assess.
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can credit analysts work from home?
Yes, many credit analysts have the option to work remotely, especially in the current digital age. However, some companies may still require their credit analysts to work on-site because cybersecurity is a significant concern in this field. To minimize risks, some companies may prefer their credit analysts to work in a secure office environment, so it ultimately depends on the company's policies and security measures.
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is credit analyst a good occupation?
Being a credit analyst is an exciting career path with promising prospects. Along with a competitive salary, you'll find abundant opportunities for growth in financial institutions and banks. You have the chance to work across various industries issuing loans and to have a wide range of job opportunities to choose from. With the constant need for credit and financial risk assessment, this is a stable and in-demand profession. If you have great attention to detail, love numbers, and enjoy analyzing data, then being a credit analyst would be an excellent occupation for you.
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what are some possible career advancements for a credit analyst?
Some possible career advancements for a credit analyst include becoming a senior credit analyst, risk manager, or financial advisor. You also have the option to become an international credit analyst who specializes in analyzing international credit risks for multinational companies.
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how do I find a job as a credit analyst?
Applying for a credit analyst job is easy: create a Randstad profile and search our credit analyst jobs for vacancies in your area. Then simply send us your CV. If you do not have a resume, no worries. Just check out our resume builder. This state of the art tool will help you to create your own resume. Need help with your application? Check out all our job-hunting tips!
