What are the various skills required to become a Credit Analyst

Do you have a keen eye for detail and a sharp mind built for crunching numbers? Then you may have what it takes to be a credit analyst, an exciting and rewarding field in finance. Credit analysis is quite a hot topic today among young professionals hoping to make their mark in the industry. As the economy continues to grow, the need for generating a high amount of capital has never been greater. Companies, banks, governments and individuals constantly need funding for their projects, investments and commercial acquisitions. Enter the credit analysts. They are knowledgeable and well-trained professionals who do the required due diligence before approving or rejecting the loan application. If you think you are up to the challenge of this fulfilling and thriving career, find out more about the skills of credit analysts below.

What Does A Credit Analyst Do?

Your job is to analyze and investigate the financial data of any party applying for a loan. You have to scrutinize the facts and figures to check if the company or individual has the ability and assets to pay back the loan with interest. You also offer financial analysis to shareholders and companies interested in buying other companies or making high-risk investments. In fact, your credit analyst skills are very impactful. You could directly or indirectly affect the national economy. Based on your recommendations, MNCs, small businesses, insurance agencies and large-scale government projects get the funding they need to expand and become profitable. It’s a challenging job and requires a lot of mental focus.

If you prove yourself as a reputed credit analyst, you will find it a highly fulfilling career.

Types Of Credit Analysts 

Risk analysts

• They are in charge of assessing commercial loan applications from large corporations.
• Their job is to weigh the pros and cons and analyze the financial data before granting or denying the loan request.
• Financial companies, banks and government firms hire risk analysts

Credit research analysts

• Before loans are granted or rejected, credit research analysts carry out due diligence to check the financial backgrounds of the applicants
• To carry out the research, the analysts use specific methods and formulae to arrive at a conclusion
• They also examine the company’s past transactions, credit ratings and financial statements
• They are employed by banks, investment services and credit rating agencies

Credit and collections analysts

• The professionals working in this capacity are recruited to ensure that companies and individuals are able to repay the loans
• They also look at the applicant’s previous records such as account statements, previous loans, etc. to gauge the risk factors, if any
• They are hired by banks and collection agencies

Job Responsibilities Of A Credit Analyst 

• To analyse loan applications in great detail to ensure financial competence
• Offer advice or guidance on credit risks
• Perform a complete and in-depth analysis of financial statements, credit history and assets
• Stay updated on market trends and developments within the finance industry
• Be informed of all government policies and regulations
• Identify any inconsistencies or suspicious anomalies and report them

Key Skills For A Credit Analyst 

The life of a credit analyst may not be for everyone. However, if you have the talent and special abilities needed, you can do incredibly well in this profession. Here are some of the skills that can make you a competent professional.

1. Analytical skills 

This is the defining skill for credit analysts. You also need proper quantitative skills to pour through the realms of financial data. You may also be required to speak to clients, investors and loan applicants to ensure all the necessary information is provided.

Many analysts need sharp detection skills to ensure all documentation and background checks are in order. If your investigation shows the clients may not have the resources to pay back the loans on time, you are well within your rights to deny their request.

2. Industry knowledge

Your job isn’t just about paperwork and financial records. You should be well versed in the regular occurrences and events within the finance industry. An efficient credit analyst is able to examine the current financial climate and assess whether or not to make recommendations. They can make informed decisions and ensure there are no sudden, unexpected surprises later on.

3. Attention to detail 

When dealing with massive sums of money, you really can’t allow any room for error. Credit analysts need to check every document thoroughly and carefully. When performing due diligence, you must pay attention to every detail, ensuring complete transparency and consistency.

4. Communication skills 

You’ll find a large part of the work includes writing financial reports and interacting with clients on a regular basis. You’ll need effective communication capabilities to convey your perspective with clarity.

5. Expertise in technical and financial concepts 

Knowledge is power. Your mastery of the various core subjects in the finance and investment industry is an essential part of your job. When explaining why you are approving or denying a loan, you need to make valid and logical arguments. You also need to be proficient in risk analysis and statistical software.

6. Multitasking abilities 

You will have to go through a vast amount of information in various formats at one time. There is also a high chance that you will be processing several applications simultaneously. You need to be able to flawlessly juggle the workload and carry out the due diligence required for each task.

How The CFA Course Helps You In Acquiring Credit Analyst Skills

The chartered financial analyst program is one of the most prestigious and recognised courses around the globe. Since 1947, the CFA credential has become a force to reckon with within the finance industry. The course is perfect for students hoping to join the action-packed, pressure-filled world of investment management. It offers a well-designed and informative curriculum, along with the skill development needed in this field. The course also provides the necessary skills for credit analyst jobs.

Most of the world’s leading finance companies and investment firms prefer CFA holders due to their vast and specialised expertise such as portfolio management, financial analysis and equity investments. Little wonder then, there are more than 150,000 CFA charter holders working in more than 160 countries.

Advantages Of Becoming A CFA-Qualified Credit Analyst:

• As a budding credit analyst, the CFA gives you a solid foundation in finance and a comprehensive understanding of the financial and investment markets
• The syllabus has hard-core topics such as:
  • Portfolio management
  • Ethics and professional standards
  • Quantitative methods
  • Alternative investments
  • Equity investments
  • Economics
  • Derivatives
  • Financial reporting and analysis
  • Fixed income
  • Corporate Issuers

• You also receive a thorough education in technical and practical skills
• The CFA designation is preferred by investment organizations, banks, credit rating agencies, insurance firms, and credit card companies
• Most companies who hire CFA-certified candidates find they don’t need to spend much time or effort on on-the-job training
• There are plenty of career opportunities available to the CFA alumni courtesy of the CFA societies worldwide

Proschool’s Cutting-Edge CFA Program

When it comes to your CFA journey, Proschool leaves no stone unturned. Many students from this professional academy have gone on to enjoy great success in their careers. They have benefitted from Proschool’s functional, intensive and effective teaching methods. They have an efficient teaching staff who help students learn better by simplifying technical concepts. They also ensure you learn technical and practical applications including the skills of a credit analyst. It is a well-structured, yet innovative program that gets you well-prepared for the CFA exams.

Here below are some more reasons why Proschool is a highly acclaimed institution:

• The institute has a vast collection of practice questions, prep books, online resources and other study materials to support your financial education
• The faculty helps students set up a study plan in such a way that they can cover the whole syllabus in just 6 months and revise the course in the remaining 3 months
• Students can also solve up to 5 CFA mock tests as part of the Proschool package deal
• The CFA-certified faculty members are approachable in case of any questions or clearing of doubts
• You can register with Proschool and attend classes in most of the major cities in India or you can study online

In Conclusion 

Credit analysis is a coveted and respected field that offers immense opportunities for career growth. However, to be in this business, you need the essential skills for a credit analyst. A CFA course can help you develop your abilities, strengthen your finance knowledge and get you 100 percent ready to apply for job openings in banks and other financial companies.

Find out more about the CFA program here