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Credit Analyst

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What does a Credit Analyst do?

A credit analyst undertakes risk assessment analysis of various types of lending proposals from the straightforward to the very complex. Positions as a credit analyst can appear in a variety of financial institutions ranging from banks (commercial or investment banking) to credit rating agencies and investment companies. The roles can vary according to the nature of the employer.

One function that the credit analyst can perform is to manage the relationship between front line managers and the client to ensure that they receive a quality service and quick response to requests for credit.

A credit analyst needs to be aware of the legal, compliance and market risk related issues involved in the approval of credit. The role is very much one of risk management; risks must be understood and communicated and credit exposures kept in line with the employer's limit on risk bearing. The function can be seen in its broadest sense in the commercial banking sector, where the emphasis is now very much on business banking.

Managers are sent out to visit customers and, utilizing credit skills, prepare a credit application (perhaps to purchase new equipment for a business). This would then be presented to the credit analyst. This application would follow a very structured format and the credit analyst would then make a decision based on a number of factors, such as: the purpose of the application; viability; customer track record; customer credit-worthiness; security.

While credit-scoring systems might be solely used for small amounts of credit, such as for personal loans, they would only form one part of the credit and risk analysis process for much larger amounts of credit.

Typical activities will very much depend upon the business of the employer but can include: providing quality service to internal customers through undertaking risk assessment analysis of various types of lending proposals, from the straightforward to the very complex; analyzing financial information; advising and recommending changes to policy and procedure; providing consultancy service on credit issues and quality to other internal functions or perhaps to clients; developing and improving the quality of credit submissions.

Progression will vary depending on the nature of the employer. For example, working as a credit analyst is very much a step on a career path in clearing banks, with progression possible to and from business banking and corporate banking and also to other banks as well as to other companies in the financial services sector. With experience, some may move into consultancies.

Similarly, those graduates who train with other organizations, such as investment banks, foreign banks and investment houses could also develop with their employer into more senior positions and possibly move into other functions or other financial institutions. Those who join companies on graduate training programs are likely to progress into management positions.

Progression may also require moving employer in order to access new and more senior opportunities. Acquiring specific qualifications, post entry, may also be a requirement for career progression with some employers. Those who have moved into the role of credit analyst with professional qualifications, such as qualified accountants, will have a particularly wide range of possible options.








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