$QDO\]LQJ$&DUHHU,Q&UHGLW$QDO\VLV_,QYHVWRSHGLD

Search Investopedia

DICTIONARY
Life Stages

INVESTING
Credit & Loans

TRADING

Insurance

Retirement

MARKETS
Home & Auto

PERSONAL
FINANCE
Savings

WEALTH
MANAGEMENT

Budgeting

FINANCIAL
ADVISORS

Entrepreneurship

Taxes

EXAM PREP

Symbol

TUTORIALS

SearchSearch



VIDEO

Register |

STOCK
SIMULATOR

Net Worth

Analyzing A Career In Credit Analysis

By Chizoba Morah | October 21, 2008

SHARE

TWEET

Credit analysis is a job that comes with lots of responsibility. Generally, a credit analyst is
responsible for assessing a loan applicant's credit worthiness.
worthiness. Depending on the area in which
a credit analyst chooses to work, these applicants could be individuals or companies. (To
learn more, read What Is A Corporate Credit Rating.)
Credit analysts are typically employed by commercial and investment banks,
banks, credit card
issuing institutions, credit rating agencies and investment companies. Read on to find out if
shouldering this kind of responsibility is for you.
What Does a Credit Analyst Do?
A credit analyst is responsible for gathering and analyzing financial data about clients,
including paying habits or history, earnings and savings information, and purchase activities.
After the data has been gathered, a credit analyst evaluates the data and recommends a
course of action for the customer. For example, a credit analyst who works with a bank or
organization that issues credit cards collects data about clients who have defaulted in their
payments. After analyzing the data, the analyst might recommend closing the card or
reducing the credit line.
line. Credit analysts are not limited to clients who have defaulted in their
payments. A credit analyst can also be responsible for potential customers seeking new credit
or customers who are being considered for credit line extensions.

Subscribe to our Free Newsletters!

Enter e-mail address

Sign Up
Learn More

Educational Requirements
The minimum educational requirement for the position of credit analyst is a bachelor's
degree in finance
finance,, accounting or another related field. A bachelor's degree in finance or
accounting exposes you to subjects like basic accounting and finance, statistics, ratio analysis,
analysis,
calculus, economics
economics,, industry assessment and financial statement analysis. These subjects are
necessary to function as a credit analyst because they aid in risk assessment. Educational
subjects like industry and ratio analysis are necessary because part of assessing the risk for a
company includes assessing its environment.
While having a bachelor's degree in a finance-related field comes in very handy, some
companies do not require it. Some banks and companies provide on-the-job training to credit
analyst employees who do not have finance-related degrees. On most occasions, these
companies require some work experience in an accounting/finance-related field or a
graduate degree in a business-related field. Depending on the level of the job, a company
might require a credit analyst to have a Chartered Financial Analyst (CFA) designation. (To
learn more, read What Does CFA Mean?)
Other Required Skills
Some other skills that a credit analyst must possess include the following:

Trading Center

Partner Links

Diligence: This is the ability to pay great attention to detail. As a credit analyst, any
KWWSZZZLQYHVWRSHGLDFRPDUWLFOHVILQDQFLDOFDUHHUVFDUHHUFUHGLWDQDO\VLVDQDO\VWDVS





$QDO\]LQJ$&DUHHU,Q&UHGLW$QDO\VLV_,QYHVWRSHGLD

piece of information or data that is missed can lead to incorrect analysis of a customer
and may cause potentially costly problems for the client involved.

Quantitative Analysis Skills: A credit analyst has to be able to look at or create a set of
numbers and be able to know what they mean for each particular client.
Written and Oral Communication Skills: A credit analyst must be able to effectively
disseminate decisions to a variety of people, either orally or in print. Coming up with a
solution to a problem is of little use if you cannot effectively communicate it to others.
Knowledge of Industries: Sometimes a credit analyst is assigned to work with companies
and firms that operate in a particular industry. For this reason, a great understanding of
the ins and outs of a particular industry can come in handy. If you don't know many
industries, just be sure to do your research before you show up for an interview.
Multitasking and Prioritization Skills: A credit analyst needs to be able to work on
different projects at once and prioritize projects effectively. This is because a credit
analyst might be assigned to work with different clients at the same time.
Experience with Financial Software: A credit analyst has to be comfortable with some
software like Microsoft Excel and other financial software used to analyze numerical
data. (To keep reading on this subject, see Microsoft Excel Features For The Financially
Literate.)
Benefits of Being a Credit Analyst
One major advantage to being a credit analyst is that you are not limited to a particular type
of company. A credit analyst does not have to work only for a bank or credit rating agency. A
credit analyst can work for any company that offers financing for its products and services.
This means that a credit analyst can work with an automobile manufacturer, retail store,
utility or even an energy company.
Another benefit of being a credit analyst is that it can lead to higher and exciting career paths
like investment banker, portfolio manager and loan and trust manager. And, according to
Salary.com, an average credit analyst with a bachelor's degree earns between $34,000 and
$57,000, which is a pretty solid wage in this sector. (To find out who makes the big bucks, see
Top 4 Most Competitive Financial Careers.)
Conclusion
While it sounds like a lucrative and easy job to do, being a credit analyst is also a stressful job.
As a credit analyst, the decisions you make can determine the interest rate at which an
individual or a company borrows, or whether the client gets a loan or a credit line and what
amount he or she will receive. A credit analyst has huge responsibilities and the position
should not be taken lightly. This can be a lucrative job, but just like any other one, it requires
a lot of hard work.

RELATED ARTICLES
OPTIONS & FUTURES

The Alphabet Soup of Financial Certifications

We decode the meaning of the many letters that can follow the names of
financial professionals.

PROFESSIONALS

Quants: The Rocket Scientists Of Wall Street

Blend math, finance and computer skills to command a high - and well deserved - salary.

KWWSZZZLQYHVWRSHGLDFRPDUWLFOHVILQDQFLDOFDUHHUVFDUHHUFUHGLWDQDO\VLVDQDO\VWDVS





$QDO\]LQJ$&DUHHU,Q&UHGLW$QDO\VLV_,QYHVWRSHGLD

PROFESSIONALS

An Introduction To The CFA Designation

The CFA designation is seen as the key certification for investment
professionals. Find out what the CFA signifies for candidates and investors.

PERSONAL FINANCE

Testing 3 Types Of Analysts

Different clients require different research reports. Which type of analyst
do you need?

PROFESSIONALS

Fixed Income Trader: Career Path & Qualifications

Discover the career path the most fixed income traders follow and learn
more about the qualifications needed and the average salary they earn.

RETIREMENT

Six of the Best Credit Cards for Seniors

Youre retired, but the expenses don't stop. If youre looking for a new
credit card, which should you choose? Here are six cards for seniors to
consider.

PROFESSIONALS

Controller: Job Description & Average Salary

Learn about becoming a controller and what the job entails. Understand the
education and skills required, and how much money you can expect to
make.

PROFESSIONALS

Data Analyst: Job Description & Average Salary

Learn about a data analyst career and how much money you can expect to
make. Understand the skills and education needed to become a data analyst.

CREDIT & LOANS

Disney Rewards Visa vs. Disney Premier Visa Card

Disney lovers, find out which Disney credit card is right for you.

PROFESSIONALS

Controller: Career Path & Qualifications

Find out what it takes to become a financial controller, starting with
undergraduate educational requirements and moving into professional
certification.

RELATED FAQS
Q: How can you pay your Walmart credit card?
A: Holders of Walmart credit cards can make payments on their balances due by mail, online or at
Walmart and Sam's Club stores. ... Read Full Answer >>

Q: How does a cost-of-living adjustment (COLA) affect my salary?

A: Some companies build salary adjustments into their compensation structures to offset the effects
KWWSZZZLQYHVWRSHGLDFRPDUWLFOHVILQDQFLDOFDUHHUVFDUHHUFUHGLWDQDO\VLVDQDO\VWDVS





$QDO\]LQJ$&DUHHU,Q&UHGLW$QDO\VLV_,QYHVWRSHGLD

A: Some companies build salary adjustments into their compensation structures to offset the effects
ofinflationon their employees. ... Read Full Answer >>

Q: How many free credit reports can you get per year?
A: Individuals with valid Social Security numbers are permitted to receive up to three credit reports every
12 months rather ... Read Full Answer >>

Q: Is Apple Pay safe and free?

A: Apple Pay is a mobile payment system created by Apple to reduce the number of times shoppers and
buyers have to pay for goods ... Read Full Answer >>

Q: Can you use your Walmart credit card at Sam's Club?

A: Consumers can use their Walmart credit cards to shop at Sam's Club. However, they cannot use their
Walmart credit cards when ... Read Full Answer >>

Q: How can you cancel your Walmart credit card?

A: Walmart offers two types of credit cards: the Walmart MasterCard and the Walmart credit card. How
to Close Your Walmart Credit ... Read Full Answer >>

BROWSE BY TOPIC:

Chartered Financial Analyst

Credit Cards

Credit Ratings

Finance Careers

Investment Banking Career

Salary

Search Investopedia

DICTIONARY:

CONTENT LIBRARY
Articles

Terms

Stock Simulator

Symbol

CONNECT WITH INVESTOPEDIA

Videos

FXtrader

Tutorials

Slideshows

Exam Prep Quizzer

FAQs

Calculators

Chart Advisor

Stock Analysis

Net Worth Calculator

WORK WITH INVESTOPEDIA

License Content

Advertise With Us

Write For Us

Email Deployment

Contact Us

Careers

Sign Up for Our Free Newsletters!

Subscribe

2016, Investopedia, LLC. All Rights Reserved Terms Of Use Privacy Policy

KWWSZZZLQYHVWRSHGLDFRPDUWLFOHVILQDQFLDOFDUHHUVFDUHHUFUHGLWDQDO\VLVDQDO\VWDVS