What Does a Credit Analyst Do? (Plus Duties and Skills)

Updated 7 September 2023

A credit analyst is a position that often requires expertise in finance, accounting and economics. A credit analyst's abilities are necessary for many sectors to examine and analyse financial data regarding a client's background. If this role interests you, it's valuable to understand the full scope of its responsibilities, skills and compensation before committing to achieving its requirements. In this article, we explain what a credit analyst does, what are some of the most critical skills and how you may improve these skills to enhance your attractiveness to prospective employers.

What does a credit analyst do?

If you're interested in this career, you may want to know what a credit analyst does each day. A credit analyst collects financial information on businesses and people, such as valuable properties, savings, income, debts and payment history. As a credit analyst, you advise if it's safe to grant a loan or lower a credit line. This necessitates a solid grasp of economics and finance. You're likely to work primarily in banks, credit card companies and credit rating organisations, though employment extends beyond the banking industry. You may also work in big firms that deal in investing and finance.

The common duties of a credit analyst include:

assessing the credit risk of a client or an organisation
evaluating financial data and statements
reviewing credit limits
analysing client records and utilising the outcomes to suggest payment terms
preparing risk assessment reports
verifying credit and financial transactions and the status of a client
using computer tools and software programs to analyse financial data
coming up with risk mitigation initiatives and strategies

Why are credit analyst skills important?

Developing credit analysis skills can help you advance your profession in finance, risk management and economics. It can serve as a basis for furthering your knowledge of finance and investing. You're in charge of assessing business partners and consumers to determine their ability to repay debts and create income for the firm. In loan and credit applications, you propose a course of action. You may also advise company stakeholders on whether or not to make particular investments.

Examples of credit analyst skills

Here are some key talents for a credit analyst that may come in handy while applying for jobs and developing your career:

Accounting abilities

A background in accounting is usually a prerequisite to work as a credit analyst. You're responsible for fundamental accounting tasks, such as generating financial statements, balancing ledgers and evaluating data. It's also necessary to understand the many terminologies used in business management, economics and finance. While the majority of credit analysts have a bachelor's degree in accounting, economics, finance, risk management or a similar subject, some credit analysts gain their accounting knowledge through on-the-job training and employment.

Industry knowledge

It's essential for credit analysts to have a history in the sector in which they operate to provide accurate assessments and recommendations. Many businesses have distinct criteria and employ a range of investigative methodologies. It's important that you're knowledgeable about the sector that you operate in to produce credible reports and analyses. It's also critical that you ensure your sector expertise is up-to-date to make the most of opportunities.

Computing skills

To successfully perform large quantities of activities, modern organisations rely largely on computerised technology. Many firms employ niche and specialised financial and accounting systems to analyse enormous volumes of data. While firms offer training on how to use various computer applications, having a fundamental understanding of computers can assist you in mastering more sophisticated software.

Communication skills

A credit analyst's tasks include creating reports on rating, financial position and analysis, which necessitates good writing abilities. You frequently collaborate with firm management and clients to address concerns and clarify specific facts. You also typically operate in a team environment that necessitates frequent contact and engagement with co-workers. All of these tasks require excellent verbal and non-verbal communication skills.

Related: 4 Types of Communication

Problem-solving abilities

Credit analysts' responsibilities include assisting clients in meeting their financial needs and goals. This work necessitates significant analytical abilities, ingenuity, a dependable background in the area and a constructive approach toward problem-solving. You can develop long-term connections with clients if you're effective in assisting them. Having the ability to tackle tough problems is also beneficial in decreasing risks in the company.

Detail-orientation

Credit analysts deal with a wide range of information daily, including financial data and customer personal information. You manage sensitive and critical company information, which is why one of the most important qualities that recruiters look for in a credit analyst is the ability to pay attention to details. Be mindful that a slight error can result in a major impact on your clients and organisation.

Documentation and organisation skills

It's important for credit analyst to retain up-to-date records of their clients' information. You maintain and structure all of your papers in a way that allows you to deliver information to management or clients as soon as they require it. Organisation skills also assist you in adhering to any rules or norms in your industry.

Knowledge of risk analysis

Knowledge of risk analysis enables a credit analyst to anticipate any potential problems while managing financial data and producing reports and suggestions. It's important that you're able to explain the intricacies of a loan or investment in detail so that managers and business owners understand the risks involved. This allows owners to avoid needless risks while also increasing their wealth.

Investigative abilities

A credit analyst's other typical duty is to interrogate customers to acquire more information and confirm the integrity of their responses. You frequently manage enormous volumes of information to make sound recommendations. A credit analyst in the real estate business, for instance, gathers evidence through background checks and supporting papers to guarantee customers can repay a loan in a reasonable length of time.

Quantitative analysis skills

Quantitative analysis skills are numerical, measurable and objective. Your day-to-day responsibilities focus mostly on evaluating information ranging from the client's regular revenue to statistical data. These activities require sophisticated arithmetic skills and the ability to evaluate quantitative data.

How to improve credit analyst skills?

Below are some tips and suggestions to help you enhance your credit analyst skills:

1. Determine your skill level and create a checklist

Before you can create a plan, it's valuable to assess and determine your current skill level. You can then proceed by creating a checklist of the abilities necessary to become a credit analyst and comparing it to the talents you already possess. You may then set milestones to track your development and visualise the state of your abilities.

2. Take advantage of all available resources

Utilise all resources available to you to assist you in improving your credit analysis abilities. You can read books to aid you with your studies in economics, finance and quantitative analysis. If you want to learn on your electronic device, you may also download e-books and learning assistance applications. You may also try searching for the exact talents you wish to develop on video streaming sites to obtain more suggestions and step-by-step instructions on how to enhance them.

3. Earn a degree or participate in training programmes

To become a credit analyst, you can acquire a Diploma or Bachelor's Degree in Finance, Accounting or Business Administration. You can also get a master's degree to broaden your work possibilities and enhance your earning potential. Alternatively, you can enrol in training programmes conducted online or in person. There are training programmes available that teach you a range of skills and credit analysis procedures.

4. Attend seminars and workshops

Seminars, conferences and workshops on various topics, such as financial literacy and credit score comprehension, are commonly accessible. Taking financial and skill development seminars and workshops may be quite beneficial, especially for those in your subject of interest. Doing so may also enhance your resume and attractiveness to prospective employers.

5. Gather hands-on experience

Getting hands-on experience in credit analysis may be quite beneficial in strengthening your abilities. First-hand experiences may help you improve your sense of performance, which you can generally only learn on the job. Applying for internships is a fantastic method to gain experience to become a credit analyst. Internship programmes frequently include training to assist you in doing everyday responsibilities and might also provide you with the opportunity to work with a mentor. Internships also function as a training ground before assuming full responsibility.

What Does a Credit Analyst Do? (Plus Duties and Skills)