A credit analyst reviews the financial picture of an individual or business to determine what the level of risk is when lending money. They may also help determine if the amount the individual or business requests can be reduced to become a less risky loan. They often work on the computer and use software programs to help analyze and calculate the data.
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How to Become a Credit Analyst
Most often, people become a credit analyst with a bachelor’s degree. However, a bachelor’s degree is not mandatory and it is just up to an employer’s preference. According to O*NET OnLine, 50% of credit analysts held a bachelor’s degree and almost 30% held an associate’s degree. Credit analysts also learn on-the-job, so degrees in business and finance are generally the degrees that can help you land a job.
Job Description of a Credit Analyst
A credit analyst reviews the financial information about an individual or business and determines how much risk is involved if money is lent. They use software programs that generate financial reports and help them evaluate a potential client’s financial status. Some of the financial information that is used includes their credit history and if they paid their bills on time, how much income a person or business is generating, and in the case of businesses, will review how similar businesses are doing in their geographic area. Finally, they draft reports that indicate the level of risk involved to inform any interested parties.
Credit Analyst Career Video Transcript
If you or someone in your family uses a credit card, a decision had to be made about whether you could be trusted to pay back the money you charge. That decision depends on the work of a credit analyst. A credit analyst examines the financial statements and credit history of individuals or companies. Based on that information, the analyst determines the degree of risk involved in extending credit, or lending money.
Credit analysts often work for banks and other financial institutions, though any corporation that extends credit might employ one or more. For example, manufacturing concerns might run credit checks on customers before starting to make products, to make sure that customer has a history of paying on time. It’s a job that requires careful consideration of information, and the ability to prepare a clear, objective report. The decisions must be made on facts, not instinct, so a credit analyst must be able to focus on details, hour after hour, and day after day.
The working conditions are usually very comfortable with an office and a standard 40-hour workweek the norm. A bachelor’s degree is the most common source of training. College graduates with business related degrees can move easily into these positions, but it can be a position for which training is available on the job. A key part of the nation’s economy runs smoothly when this job is done well. Without credit, in fact, much of the economy would grind to a halt. Houses wouldn’t be built, tuitions wouldn’t be paid, cars wouldn’t be bought, the list goes on and on. To continue the flow of credit, analysts consider whether it’s safe to loan the money, case by case.
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Credit Analysts.
National Center for O*NET Development. 13-2041.00. O*NET OnLine.
The career video is in the public domain from the U. S. Department of Labor, Employment and Training Administration.