16 Essential Credit Analyst Skills (Plus Common Job Duties)

By Indeed Editorial Team

Updated 16 November 2022 | Published 4 October 2021

Updated 16 November 2022

Published 4 October 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Credit analyst skills include those related to finance, accounting and economics. Many industries rely on credit analysts to evaluate and analyse financial data about the clients' backgrounds. Credit analysts interpret numbers and data using strong observation skills and attention to detail. In this article, we review some of the most important credit analyst skills and show how to highlight them during the hiring process.

Why are credit analyst skills important?

Developing skills in credit analysis can help you build a career in risk management, finance or economics. It can serve as a foundation for advancing skills in finance and investment. Credit analysts are responsible for evaluating business partners and customers to see if they're able to repay loans and generate revenue for the company. Credit analysts recommend a course of action in loan and credit applications. They may also give business stakeholders suggestions on whether to make certain investments.

A credit analyst gathers financial information about organisations and individuals, such as valuable properties, income, savings, debts and payment history. They give recommendations on whether it is safe to approve a loan or reduce a credit line. This requires a strong understanding of economics and finance. Credit analysts typically work for banks, credit card issuers and credit rating agencies. The job of a credit analyst extends beyond the banking industry. They can also work in major businesses that involve investment and finance.

Related: 43 Banking Interview Questions (With Sample Responses)

What does a credit analyst do?

Here are some duties a credit analyst may perform:

  • Assist in the performance of collating and compiling statistical reports

  • Assist in the compilation and analysis of company financial information

  • Provide business intelligence for decision-makers by using data to identify gaps in information and formulate strategic solutions

  • Identify shortfalls in cash flow by identifying trading partners who may provide access to funds

  • Consolidate and integrate the functions of multiple departments related to accounts receivable, accounts payable and payroll to create a more cohesive workflow

  • Support management in making business decisions

  • Support company finances by providing analytical resources particularly for budgeting, forecasting and strategic planning

  • Support product development by contributing to this area of the business

  • Assist in the performance of collating and compiling statistical reports

  • Prepare expense management, reporting and payroll reviews

  • Provide expertise related to financial reporting standards practices, including International Financial Reporting Standards (IFRS)

  • Assist in the compilation and analysis of investment analysis reports

  • Research investment opportunities for new or existing products or services

Related: What Is Credit Control? Definition, Policies and Importance

Examples of skills for a credit analyst career

Important skills for a credit analyst that may prove highly useful when applying for the job and advancing a career include:

Accounting skills

An accounting background is typically a prerequisite for becoming a credit analyst. A credit analyst normally performs basic accounting tasks such as balancing ledgers, creating financial statements and reviewing statistics. It is also important to know economics, business and finance terminology. While most credit analysts have a bachelor's degree in finance, accounting, economics, risk management and other related fields, some credit analysts built their accounting background through on-the-job training and employment experiences.

Knowledge of industry

To make a proper assessment and recommendations, it is important that credit analysts have a background in the industry they work in. Many industries have different requirements and use a variety of methods of investigation. Therefore, credit analysts are often familiar with the industry they work in to create reliable reports and analyses. Good credit analysts keep their industry knowledge up-to-date so they can make the most informed decisions.

Related: How To Become a Corporate Banker (With Steps You Can Use)

Communication skills

Credit analysts prepare reports on rating, financial standing and analysis, which requires strong writing skills. Additionally, credit analysts often work with company management and clients to discuss issues and explain their analyses. They also often work on teams that require constant communication and interaction.

Problem-solving

Some tasks of credit analysts involve helping clients meet financial requirements and objectives. This requires extensive analytical skills, resourcefulness, reliable background in the field and a positive attitude towards finding solutions, all of which are problem-solving skills. If successful in helping clients, analysts can form long-lasting relationships. Finding solutions in complex situations is also helpful in reducing risks in businesses.

Knowledge in risk analysis

Knowledge in risk analysis helps a credit analyst foresee possible challenges when handling financial data and making reports and recommendations. A credit analyst is often able to give a thorough explanation of why an organisation may approve a loan or investment, so managers and business owners have a clear idea of the risks.

Related: What Does a Bank Relationship Manager Do and How To Be One

Investigative skills

Another common task of a credit analyst is requesting information from clients and verifying their answers. A credit analyst often manages large amounts of information to make a reasonable judgement with their recommendations. For example, a credit analyst in the real estate industry collects evidence through background investigations and supporting documents to understand whether clients are likely to pay off a loan within a specific period.

Math and data analysis

Credit analysts perform mathematical computations and analyse large amounts of data. To analyse financial information like income and expenses, a credit analyst is typically skilled in data analysis using computer software. Often, a credit analyst takes on challenging jobs that involve complex calculations and statistics, such as risk management.

Analytical and critical thinking

To make the most informed decisions in the profession, a credit analyst often has critical and analytical thinking skills. They look at all possible alternatives and consider the advantages and drawbacks of different choices. Additionally, they're also logical in their approach when testing hypotheses or problems. Analytical skills are essential for credit analysts to arrive at the best decision before making recommendations.

Related: What Does a Banker Do and How Can You Become a Banker?

Data management skills

Much of a credit analyst's job involves managing data for use by other teams or use at a later date. For example, credit analysts may store information they collect to contribute to larger databases or other, related projects. They may help enter, sort and review these large data collections.

Financial math skills

Finance is an important part of the job of credit analysts. They commonly take on financial work like calculating loan-to-value (LTV), evaluating loan terms and comparing loan types. To make the most accurate computations, a credit analyst is typically well-versed in accounting procedures and economics. They can also clearly explain complex financial topics because many banks request credit analysts to communicate directly with clients or company owners.

Investment analysis

Credit analysts often have extensive knowledge of investment analysis. They may analyse returns on investments, the impact of inflation and risk-adjusted results. Analysing investment information helps credit analysts recommend appropriate investments for business owners or customers.

Related: What Is an Investment Banker and How To Be One

Budgeting skills

Credit analysts may forecast future financial transactions. To do this, they know how to create financial forecasts using assumptions, earnings trends, market standards and other important information. A credit analyst may also create budgets for projects and programmes by estimating income and expenditures over the year.

Financial forecasts

An important part of financial forecasting is projecting loan and investment data. To make a precise forecast, a credit analyst is often familiar with trends and patterns affecting financial data. They also have the ability to assess the possibility of unfavourable events in the future to accurately calculate earnings and loan payments.

Performing audits

One of the most important tasks credit analysts perform is audits for company owners or clients. A client might request an audit after noticing questionable financial data or events that affect their business stability. Additionally, they may also ask for an audit when preparing to file for bankruptcy protection from creditors.

Plans of action

Credit analysts also often create action plans that specify the best course of action for clients. This may involve creating a plan to improve a company's financial situation or creating a new accounting procedure for their business. Credit analysts are often able to create plans of action that can effectively increase efficiency.

Research

Another common task of credit analysts is performing research for their clients or employers. For example, they may search for information about a client or investor to verify their claims and savings history. Effective credit analysts produce research that is accurate and reliable.

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