Commercial banks and other financial organizations employ credit risk analysts in their credit and lending departments. They evaluate the creditworthiness of credit applicants and look at the financial performances of current customers. Analysts can deal directly with customers and business clients to get data for their evaluations, or they can partner with sales agents and credit officers who communicate directly with the clients.
If you want a job as a credit risk analyst, familiarize yourself with various analytical techniques so that you're able to determine the risks involved in lending money or giving credit to applicants. Analysts should be able to evaluate an applicant’s credit report, financial statements, payment history, and job history. For a business, analysts study operations and performance. The critical metrics compare the client's performance with competitors in the industry.
As a credit risk analyst, you produce reports and recommend changes accordingly. Sometimes, credit risk analysts have the final say on approving or denying applications. Typically, however, financial managers or loan committees make the final determination based on a review of the analyst's work and other factors.
What Does the Career Path Look Like?
Before becoming a credit risk analyst, you should consider a lower-level position as a junior analyst. This is an excellent way to get your foot in the door after you complete a bachelor's or associate degree in a financial field. Recommended majors include finance, accounting, or a business field with quantitative analysis. Having an associate degree instead of a bachelor's can hurt you in some positions; however, hiring managers for analysts in consumer credit positions are often open to a promising candidate with an associate degree and experience in the field. On the other hand, positions requiring business credit evaluation require a more robust understanding of finance and accounting principles, so these candidates need a bachelor's degree.
Do you have many years of experience with an exceptional performance rating? Apply as a junior credit risk analyst so that you can move into senior positions when they become available. In some companies, senior analysts manage a team responsible for a region, market or industry. Top-performing analysts can expect to:
- Rise into management positions in analytical departments
- Make final credit decisions
- Monitor departmental performance
If you're looking for a job as a credit risk analyst, keep in mind that most employers want to hire someone with a bachelor's or master's degree. Consider a degree that focuses on quantitative business subjects, including economics, finance, and accounting. However, some beginning level jobs are geared for professionals with an associate degree and commiserate work experience at financial institutions.
In 2015, the U.S. Bureau of Labor Statistics (BLS) conducted a survey and found that 27 percent of credit analysts listed an associate degree as their highest level of education. However, if you have a bachelor's degree and a robust work history, you're much more likely to snag a job as a senior credit analyst. You're also far more likely to move into a supervisory position with higher levels of education under your belt. Consider going for a master’s degree in business administration or a finance related field. Most managers see the value in these degrees and will give them due consideration during the interview process.
While credit risk analysts are not licensees, and there are no professional certifications needed to break into the field, you should consider going for the Credit Risk Certification (CRC) credential awarded by the Risk Management Association.
The CRC designation gives you credibility in the industry and helps you if you want to leave a current position. To achieve this certification, you need at least three years of job history in credit risk analysis. The experience requirement makes it a convenient watershed marker for hiring managers. If you decide to pursue the designation, you'll have to pass an exam covering seven topics that test your knowledge of the credit risk field.
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