Credit vs Financial Analyst: Roles, Pay & Career Growth Compared

As India’s finance sector grows, so does the demand for experts in roles like Credit Analysts and Financial Analysts. In fact, recent industry reports show that financial analysis roles are expected to grow by 6% globally by 2031, with strong demand in emerging markets like India. And with India’s digital lending market projected to reach $350 billion by 2023, credit analysis is fast becoming an essential skill.

But which role is right for you? Think of it this way:

• Credit Analysts help banks and NBFCs decide if a borrower can repay a loan, safeguarding financial institutions against risks.
• Financial Analysts, on the other hand, guide businesses on investment strategies and financial growth.

Both roles offer rewarding career paths but have different focuses, challenges, and growth opportunities. Let’s break down everything you need to know about these careers—from salaries to skills and day-to-day responsibilities—so you can decide which one fits you best.

Who are credit analysts?

Before banks or money-lending companies grant their customers a loan or a line of credit, they need security. Credit analysts protect the company’s interests by verifying the borrower’s financial stability and evaluating their creditworthiness.

Credit analysts are keen observers and deep analytical thinkers. They look into an individual’s or company’s financial history, credit scores, past transactions and default payments, if any. Once they have verified all the documentation, they can decide the borrower’s eligibility. Banks, credit rating agencies, NBFCs and other finance corporations depend on credit analysts to

Job responsibilities of credit analysts

• Analyse the customer’s creditworthiness.
• Assess all risk factors involved with granting a loan application.
• Evaluate the client’s current financial condition and background.
• Due diligence to ensure all numbers and calculations are precise and accurate.
• Create credit limits for new customers and review limits for existing clients.
• Make reports and recommendations based on research findings.
• Analyse financial statements, balance sheets, credit reports and other official financial documentation.
• Conduct financial data analysis.
• Check for compliance with credit regulations.

Also Read – 7 Top Duties and Responsibilities of a Credit Analyst

Who are financial analysts?

While credit analysts focus solely on establishing creditworthiness, financial analysts have a wide scope of activities. These professionals investigate financial data and analyse various factors that could affect a company’s fiscal health. They carry out several research-based tasks to create financial strategies and investment-based decisions for the company. Their goal is to maximise profits while minimising risks.

Job responsibilities of financial analysts

• Evaluate financial data and identify economic trends
• Offer advice to the company on potential investments.
• Create reports and presentations about financial plans and projections.
• Monitor, verify and update financial databases.
• Ensure all procedures and protocols are followed by conducting due diligence.
• Analysing various investment options such as assets, stocks, securities, equity, etc.
• Create and manage budgets.
• Maintain confidentiality about all sensitive financial operations within the company.
• Calculate the risks involved with each investment opportunity before making any decisions.

Also Read – Top 9 Skills for a Financial Analyst To Reach Peak Potential

Credit Analyst vs Financial Analyst – a comparison chart

Credit Analysts vs Financial Analysts – Salary Comparison, Career Path & Growth Opportunities

Salary Comparison

When it comes to salary, both credit analysts and financial analysts have decent earning potential in India, but there are some differences based on responsibilities and demand.

Career Path and Growth Opportunities

Both careers offer great growth potential, though the journey looks slightly different for each role.

• Credit Analyst Career Path:

  • Start as a Junior Credit Analyst
  • Progress to Senior Credit Analyst
  • Climb up to Credit Manager or Portfolio Manager roles
  • Can eventually reach high-level positions like Chief Financial Officer (CFO) or Vice President of Risk Management

• Financial Analyst Career Path:

  • Begin as an Assistant Financial Analyst
  • Move up to Senior Financial Analyst or Portfolio Manager
  • Potential to transition into roles like Investment Advisor, Fund Manager, or even Chief Investment Officer (CIO)

In terms of growth, both positions allow for upward mobility. However, credit analysts often work within credit and risk departments, while financial analysts have broader options across various finance domains, such as investment banking, insurance, and asset management.

Still Confused Between These 2 Careers? Want An Expert To Guide You On A Call?

Challenges Faced by Credit Analysts Vs Financial Analysts

Every job has its fair share of challenges. Let’s dive into what credit analysts and financial analysts typically face on the job:

• Challenges for Credit Analysts:

  • Balancing Risks: Ensuring the company isn’t lending to high-risk clients while also not missing out on profitable customers.
  • Detail-Oriented Analysis: They must meticulously verify financial records and check every number, leaving no room for error.
  • Compliance Pressure: Strict adherence to financial regulations and credit policies is critical, or they risk penalties.
  • Client Interactions: Credit analysts occasionally have to explain to clients why they’re not creditworthy, which can be awkward.

• Challenges for Financial Analysts:

  • Market Volatility: The stock market is unpredictable, and financial analysts have to make quick decisions amidst constant changes.
  • High Expectations: Financial analysts face pressure to deliver accurate, strategic advice that directly affects the company’s investments.
  • Work-Life Balance: During critical financial periods (e.g., quarter-end or year-end), financial analysts often work long hours.
  • Complex Data Interpretation: Analyzing financial data requires precision, and misinterpretations can lead to significant losses.

While both roles have their unique challenges, credit analysts often deal with individual risk evaluations, while financial analysts focus on broader financial planning and investments.

Credit Analysts vs Financial Analyst – Skills Comparison Chart

Both roles require a unique set of skills, though there is some overlap. Here’s a quick comparison to understand what’s needed for each:

For anyone with strong analytical thinking and detail orientation, credit analyst roles are a natural fit. If you’re more interested in data, trends, and investments, a financial analyst role could be a better choice.

Tips to Break Into These Careers

Whether you’re just graduating or looking to switch fields, here are some tips for launching a career as a credit or financial analyst:

• For Credit Analysts:

  • Get Relevant Education: A degree in finance, commerce, or economics is preferred. Pursuing certifications like CFA or FRM can be an added advantage.
  • Gain Experience with Internships: Intern with banks, NBFCs, or credit rating agencies to gain on-the-ground experience in credit assessment.
  • Build Analytical Skills: Learn how to interpret credit reports and financial data. Skills in MS Excel and financial software are helpful.
  • Enhance Soft Skills: Good communication skills are crucial, as you’ll be interacting with clients and colleagues regularly.

Also Read – Credit Analyst | Process, Skills, Decisions, Scope, Courses.

• For Financial Analysts:

  • Pursue Relevant Certifications: CFA is highly valued, and certifications in financial modeling or investment analysis can give you an edge.
  • Stay Updated on Market Trends: Read financial news, stay informed on stock markets, and follow key economic indicators.
  • Network in the Industry: Connect with professionals on LinkedIn, attend finance seminars, or join finance-related groups to build connections.
  • Practice with Real Data: Use data available online to practice financial modeling, analyze stock performance, and develop projections.

Starting with internships or entry-level positions in finance is a great way to build experience and decide if the career aligns with your interests.

Credit Analysts vs Financial Analysts – Which Career Is Right for You?

Here’s a quick checklist to help you decide:

• Choose Credit Analyst if:

  • You enjoy assessing risk and evaluating creditworthiness.
  • You’re detail-oriented and prefer a structured role focused on analysis.
  • You’re interested in working with banks, NBFCs, and lending firms.

• Choose Financial Analyst if:

  • You have a passion for market analysis, investments, and financial data.
  • You enjoy advising companies on strategies to maximize profits and minimize risks.
  • You’re looking to work with investment firms, mutual funds, or insurance agencies.

Both careers offer rewarding paths and can lead to high-level roles within the finance industry. By understanding your strengths and career preferences, you can make an informed choice.

How Can Proschool Help You Become A Credit/Financial Analyst With Ease?

When it comes to the big battle of credit analyst vs financial analyst, it can be a difficult choice to make. If you still can’t decide between the two, then it makes sense to do the CFA prep with Proschool.

The syllabus is designed to give you a solid foundation in various finance and investment concepts including credit and financial data analysis. Proschool ensures you learn with some of the industry’s top professionals who will guide you towards the right career.

The professors simplify complex concepts, use active learning methods for a better understanding of the material and help students get a taste of the real-world work environment. Through this intense learning experience, students are in a better position to know which career is best for their skills. They know how to choose between credit analyst vs financial analyst.

Why Proschool is best for CFA students:

• Students receive customised study plans for the CFA course, along with three months of syllabus revision.
• Professors ensure students learn, understand and grasp all elements of the CFA curriculum through personalised attention and doubt-clearing sessions.
• Additional resources, such as over 2,000 practice papers, mock tests and learning videos are available for students to prepare for the CFA exams.
• Proschool offers a one-month online foundation module for all students who don’t have a background in finance.
• Once certified, you can apply for job positions on Proschool’s placement portal, which has access to multiple jobs in the finance and credit industry.
• Proschool staff also helps students during the recruitment process by enhancing their resume writing skills and learning how to present themselves during interviews.

Conclusion

So, in the battle of credit analyst vs financial analyst, which emerges as the winner? While both professions offer multiple opportunities and great scope for growth, the roles and responsibilities vary. When working on your CFA certification, pay close attention to the topics that interest you the most. Speak to your teachers, mentors and industry professionals to learn more about the two designations. Once you have done the research, then you can start your journey as a finance professional.

FAQs

How can I work as a credit analyst?

A minimum qualification of a bachelor’s degree in commerce, finance or economics is required. You can also hold a Master’s degree, an MBA, CA or FRM certification. Some companies prefer to hire CFA-certified professionals.

Once you have your educational credentials, you can start applying for jobs. It can help to work as a trainee or intern at leading finance companies to understand the job requirements. Work towards enhancing your technical and soft skills, and soon you’ll be ready to be a proficient credit analyst.

What are the 5Cs of credit?

The 5 Cs of credit are relevant guidelines that help credit analysts accurately and efficiently analyse the creditworthiness of every applicant. They are Character, Capital, Capacity, Collateral and Conditions. A credit analyst will examine each parameter to assess the borrower’s financial eligibility.

Credit analyst vs financial analyst — what will suit me better?

Credit analysts have a singular focus — to analyse a borrower’s financial conditions before granting or denying the loan or line of credit.

Financial analysts work with a larger scope, as they analyse market data, create financial strategies and identify investment opportunities.

You can decide which is more appealing or best suited for your talents. A CFA course will make you a candidate for both job profiles and can help you learn more about each role to make an informed decision.

Is credit analyst a good career?

Yes, it is. Credit analysts enjoy a good work-life balance. They work in a stimulating and challenging work environment and there is plenty of room for growth and career enhancement. Credit analysts can even move laterally within the finance industry, and take up jobs in other fields such as portfolio management, corporate finance or sales.