How To Become a Credit Analyst

There are many routes to becoming a credit analyst, but all require mastering certain skills and technical knowledge. Here is a comprehensive guide with 5 steps to help you become a credit analyst—including key skills, job roles, and responsibilities.

How to Become a Credit Analyst

The U.S. runs on credit. Every day, people need money to return to school, buy homes and cars, and pay their monthly bills. Companies need credit to purchase merchandise and facilities. There is no shortage to the number of loans Americans need, and that number continues to increase as Americans try to recover from the pandemic. ‌With such demand, there is also a great need for people who can help put these loans in place. A credit analyst is one of the key people making that possible.

Being a credit analyst opens the door to many top companies, including Bank of American, Ally Financial, Ford Credit, American Express, Capital One, J.P. Morgan, and more. And the demand is expected to increase more than eight percent over the next five years. If this sounds like a rewarding career path, continue reading to learn how to become a credit analyst.

What Are the Responsibilities of a Credit Analyst?

‌‌At the foundation, a credit analyst is charged with reviewing either a company’s credit situation or that company’s clients. Through this review, the analyst will help determine potential weaknesses and provide recommendations for solutions.

‌For example, a credit analyst that works for a loan department will review borrower applications. Based on their review, they will recommend either approving or denying the application.

‌A credit analyst’s responsibilities often vary according to their job description. For instance, those employed by credit card companies or real estate companies will likely have different tasks than those that work for investment companies. However, the following are some common tasks assigned to credit analysts:

  • ‌Entering credit applications into the system and gathering the necessary information to open a line of credit
  • Evaluating and preparing reports on a client’s degree of risk to help determine if the company should lend them money
  • Using a client's credit data to recommend and create payment plans
  • ‌Establishing the terms of the loan provided to a borrower
  • Evaluating a company’s financial statements to help it maintain a healthy credit
  • Helping supply, sales, and marketing departments control credit usage
  • ‌Assisting organizations in filling out loan applications and providing all necessary documentation
  • ‌Using spreadsheets to model new and existing credit applications
  • Providing reports and recommendations to employers on the company’s credit situation and how to improve it
  • ‌Ensuring all lending protocols are in compliance

‌How To Become a Credit Analyst in 5 Steps

Become a Credit Analyst

‌‌Different companies have different requirements, but the following are the basic steps to consider.

1. Understand the job‌

‌The first step in becoming a credit analyst is to understand what the job entails, as it’s not always a good fit for everyone. It’s important to understand what you are entering into before you make the move.

‌Being a credit analyst comes with a lot of responsibility. In short, you will be making decisions about a person’s or company’s financial life. This level of responsibility often leads to a great deal of stress. If you choose this career path, be sure you have tools in place to help you relieve any stress you might face.

‌Another important factor is that this career usually requires working at a company’s location during business hours. If you are searching for a job with set hours, being a credit analyst is a good choice. If you are looking for something with more freedom, you might want to consider a different field.

2. Get educated

‌‌The next step is to get the education necessary for the job you want. Some employers may provide training without requiring a degree. However, most companies require that you have an associate’s or bachelor’s degree in a field such as finance, accounting, economics, or a related field.

‌Many companies also require that applicants have some level of professional work experience in finance. Others will accept experience in the financial field in place of a degree.

‌As you can see, the educational requirements vary. However, if you want more career options, your best bet is to obtain a bachelor’s degree.

‌3. Get certified

‌Though not required for all positions, many companies prefer to hire credit analysts that have a professional certificate for their field. One of the main certificates is the Certified Credit and Risk Analyst, or CCRA. It is offered by the National Association of Credit Management (NACM) and is a well-respected certification.

‌A newer course is the Commercial Banking & Credit Analyst, or CBCA. It is offered by the Corporate Finance Institute and entails taking a series of very comprehensive courses.

‌There is also a Credit Risk Certification (CRC) and a Certified Credit Professional (CCP) industry certification. Both of these, however, require that you have several years of experience before taking them. You do not need them to enter the field, but they can help you advance in your career down the line.

‌To determine if you need any certifications, research the companies you are interested in working for. Doing so can tell you what steps you should take. Keep in mind, though, that even if none are required, certifications can open more doors for you.

‌4. Gain experience

‌There are plenty of entry-level positions that you can likely get right out of college. However, many require some level of experience.

‌‌If possible, sign up for an internship in a financial company while you are obtaining your bachelor’s degree. This will give you experience for your resume, leading to a greater chance of getting the job you want.

‌‌If an internship is not possible, start with an entry-level position that doesn’t require experience. You might not receive the best pay, but this step can help you gain what you need for a higher rate of pay later. Start where you can and work to build up to better opportunities.

‌Also, consider a mentor in your field for a greater chance of career growth.

‌5. Build your skills

‌‌In addition to education and experience, there are certain skills that you’ll need as a credit analyst. While not always the case, having these skills alone can sometimes get you hired at a company that doesn’t require a degree. These skills include the following:

  • ‌Knowledge of the credit industry. You can gain this through individual courses, books, and reports
  • ‌Organizational skills. You’ll likely be handling multiple projects or accounts at a time
  • ‌Knowledge of computer programs—proficiency with Microsoft Excel and other financial software
  • ‌Good communication skills. You need to effectively report any decisions that should be made or the results you find
  • Interview skills. Interviews play a large role in the hiring process

‌All of these skills are ones you can learn and work on independently, without the need for any degree.‌

‌Credit Analyst Salary

Credit Analyst Salary

‌According to the U.S. Bureau of Labor Statistics (BLS), the median annual wage for a credit analyst is approximately $86,170. The bottom 10% make an average salary of $44,250 per year, and the top 10% make about $146,690 per year. Your pay will depend directly on your position, education, and experience.

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