Credit analysts work for financial organisations and other major businesses involved in credit, such as mail order and telecommunications businesses. They consider the assets of potential and existing customers. They then use statistical and accounting criteria to work out the customers' ability to pay and the risk involved in giving them credit. This leads to an assessment of the customers' creditworthiness. They use this analysis to make recommendations to senior management.
A credit analyst's work varies between organisations. Credit applications differ widely, from a personal loan to capital to establish or expand a business. Credit analysts dealing with personal credit look at individual circumstances. Analysts dealing with business applications may have to consider factors like economic growth and the stability of the country.
A credit analyst's duties generally include some or all of the following tasks:
Credit analysts spend much of their time working with computers, identifying specific information requirements, analysing data or writing reports and presentations. Their work involves a lot of figure work and administration.
Credit analysts must have a sound understanding of legal, compliance and business issues as they affect both their own and their clients' organisations. Most jobs involve the challenge of developing improved systems of risk assessment and credit scoring.
Credit analysts work normal office hours, Monday to Friday. They may sometimes have to work longer, depending on their workload and the need to meet deadlines. There may be opportunities for flexible hours and part-time working.
The work is office based, with analysts spending much of their time working at a computer.
A newly appointed credit analyst may start on around £20,000 to £25,000 a year. An experienced analyst may earn between £35,000 and £40,000 a year.
Senior analysts working for major corporations as part of the senior management team may earn up to £60,000 or more.
Additional benefits may be available. They can include subsidised mortgages, pensions, private healthcare and share option schemes.
Credit analysts are employed by:
- Commercial and investment banks
- Investment companies
- Building societies
- Insurance companies
- Financial services organisations
- Credit rating agencies
- Consultancy firms
- Other large organisations
There are also some analysts who are self-employed and work freelance.
Although job opportunities are available throughout the UK, most opportunities are found in and around London, West Yorkshire, Cardiff and major cities in Scotland.
The number of credit analysts has grown in recent years. Vacancies may be advertised in national newspapers and in publications such as The Banker and The Economist. Vacancies are also advertised by specialist recruitment agencies and on websites such as www.efinancialcareers.com and that of the Institute of Credit Management (ICM).
Most entrants into this work have a degree. Relevant degree subjects include economics, finance, business studies, maths and statistics. Other subject areas that include a high level of numerical content may also be accepted, such as computer science, physics and electronics. Arts graduates with strong numeracy skills may also be accepted. Degree course entry usually needs at least two A levels and five GCSE's (A*-C), or equivalent qualifications such as the Advanced Diploma in business, administration and finance.
Some employers have graduate training schemes for entrants with a degree. Entry to such schemes is very competitive.
Some credit analysts enter this work having first studied for a postgraduate qualification in a subject such as financial risk management. Entry to postgraduate courses is with a first degree. This route can be particularly suitable for people who have a non-relevant first degree.
A number of professionally qualified people from other areas of work become credit analysts, eg those from law, banking, accountancy and financial planning.
Training varies between employers. Many of the larger commercial and investment banks have graduate or career training programmes. These programmes combine formal study with practical training that includes shadowing experienced members of staff and mentor schemes.
Training programmes are likely to involve specialist placements and cover all aspects of the job including:
- In-house processes and software
- Time management
- Scorecard development and implementation
- Business skills
- Report writing
- Presentation skills
- Team working
Staff may be expected to work towards relevant qualifications:
The ICM offers Level 2, 3 and 5 Diplomas in Credit Management. Success at Level 5 can lead to an accelerated route to the two-year foundation degree in credit management at Thames Valley University, then to the university's one-year part-time honours degree in credit management. It may also be possible for holders of the Level 5 Diploma to study for a Masters degree in business administration (MBA).
Other professional qualifications relevant to credit analysis include:
Association of Certified International Investment Analysts (ACIIA) Certified International Investment Analyst.
CFA Society of the UK Investment Management Certificate.
Chartered Institute for Securities & Investment Risk in Financial Services Qualification.
Continuing professional development (CPD) is important for credit analysts as they must keep up to date with developments in their sector. CPD can include activities such as reading relevant journals and attending courses and conferences.
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A credit analyst should:
Credit analysts may progress to senior analyst, then risk manager and senior risk manager. Moving between employers may help analysts to progress more quickly. Credit analysts may transfer to consultancies, or become self-employed and work on a freelance basis.
It may be possible to transfer into different areas of finance, such as marketing or business and corporate lending.
Association of Certified International Investment Analysts (ACIIA),
Feldstrasse 80, Buelach, Zurich, CH-8180, Switzerland.
The CFA Society of the UK, 2nd Floor,
135 Cannon Street, London EC4N 5BP
Tel: 020 7280 9620
Chartered Institute for Securities & Investment,
8 Eastcheap, London EC3M 1AE
Tel: 020 7645 0600
Finance & Leasing Association,
Imperial House, 15-19 Kingsway, London WC2B 6UN
Tel: 020 7836 6511
Institute of Credit Management (ICM),
The Water Mill,
Station Road, South Luffenham, Leicestershire LE15 8NB
Tel: 01780 722900
Additional resources for job seekers and those already in a job.