What Is a Credit Analyst?

Credit analysts play a pivotal role in companies by assessing financial risk through the analysis of financial information. Using the results from this analysis, credit analysts provide recommendations on whether a loan or other request for credit becomes granted or rejected and what the particular terms of the deal are. Credit analysts collaborate with various departments in a company, such as accounting and legal, to inform their decision-making regarding these complex challenges.

Working as a credit analyst in the United States grants you an above-average salary and a favorable job outlook for the future. To determine how to break into this discipline, learn more about job duties, the different types of credit analysts working in various industries, standard skill sets, and education requirements. We also provide an example of a typical career path to help you envision if this is the direction you want to pursue. 

What does a credit analyst do?

Credit analysts evaluate and analyze the financial risk of investments, individuals, or businesses. As a credit analyst, you will work as a finance professional, calculating the chance that an entity can pay back a financial obligation, such as a loan. You'll predict the expected loan return by analyzing critical financial information as part of your daily duties. 

Credit analysts calculate risk by building and maintaining thorough models based on statistics and math. Since this job handles all aspects of risk analysis in varying contexts, another common name for the position is a credit risk analyst. 

Determine creditworthiness 

When dealing with individuals or companies, the main goal of credit analysts is to determine the client's creditworthiness. To do this, you'll need to consider all relevant financial information to provide a thorough recommendation on how to proceed. If the borrower in question is an individual, the financial information you use for analysis may include an in-depth look at their payment history, how much debt they have, their assets, and how much their yearly income is. 

For a corporation looking to receive a loan or other credit, you analyze their financial statements, identifying their income as a first step. Their income showcases if they can pay off a new loan on time. You then specify the company’s debt and assets to determine how large of a loan they qualify for. Additional factors you may consider include income growth, how much market share they hold, and their trustworthiness. 

Analyze data

Credit analysts establish the level of risk associated with the entity inquiring about receiving a loan or new credit by analyzing essential credit data. The result of this analysis may produce a few different outcomes like the following:

• Approving the loan application or request for a credit account

• Declining the loan application or request for a credit account

• Extending an established line of credit

• Raising a credit limit

• Lowering a credit limit

Suppose approval for a new loan or application for credit occurs. In that case, the work completed by a credit analyst helps determine the terms included in the deal, such as the interest rate. 

Types of credit analysts

Credit analyst roles exist in various company types and present a diverse set of specialized opportunities for you to pursue. In all credit analyst-related roles, your main focus is assessing financial risk to determine if an individual or business qualifies for a loan or other form of credit. Still, the context in which you conduct this analysis may vary from role to role. A few of the common types of credit analyst jobs available include:

• Commercial credit analysts, who assess business applicants for commercial lines of credit and loans 

• Mortgage bankers, who assess applicants looking to obtain a loan to refinance their existing mortgage or buy a new home

• Bond analysts, who work for financial institutions to conduct research and analysis on various bond types, such as treasury, corporate, and municipal bonds, by reviewing financial statements and other key metrics 

• Credit and collections analysts, who work with collectors in the debt repayment process in addition to assessing individuals’ creditworthiness for new loans and lines of credit

• Loan officers, who help applicants find loans to meet their needs and conduct initial screening

Types of companies credit analysts work for

Organizations of all types require credit analysts as part of the business to identify their counterparties' credit limits and conduct cash flow analysis. Commercial banks utilize credit analysts to analyze loans for small businesses or individuals in the community. Credit rating agencies, like Moody’s, employ credit analysts to handle ratings. In these roles, you judge various companies' risk characteristics and financial data to give them a credit rating.

Some credit analysts may be responsible for handling and assigning credit scores to people. However, nowadays, this is mostly an automated process through artificial intelligence. The types of companies credit analysts may work for include:

• Commercial banks

• Investment banks

• Credit card issuers

• Insurance companies

• Credit rating agencies

• Investment companies

• Manufacturing companies

• Government agencies

• Health care providers

Credit analyst tasks and responsibilities

Your overall tasks and responsibilities may vary depending on the company you work for and the specific focus of your position. As a credit analyst, you usually work in an intense, office-based setting, following regular hours of 40 per week and a general set of duties, such as the following:

• Analyzing the financial statements and additional financial data of potential clients

• Tracking and updating all critical information needed to analyze credit scenarios

• Evaluating the risk profile of investments

• Detailing essential terms for a loan, such as the appropriate interest rate and credit limit

• Creating reports to detail the risk level of various counterparties

• Calculating financial ratios based on the financial data of a client

• Determining loan profitability

• Preparing applications for loans and various contracts

• Confirming that financial information or contract documents contain accurate data

• Maintaining compliance with established lending procedures

• Speaking to lenders and answering their questions

Credit analyst skills

As a credit analyst, you'll utilize various technical and workplace skills to complete your job effectively.

Technical skills

Applicable technical skills for credit analysts to have include:

• Accounting

• Financial statement analysis

• Statistics

• Database management

• Mathematics

• Risk analysis

• Computing

• Word processing

• Spreadsheet processing

Workplace skills

Practical workplace skills for credit analysts to have include:

• Problem-solving

• Time management

• Detail-oriented

• Communication

• Research skills

• Documentation skills

• Ability to multitask

Credit analyst salary and job outlook

According to Lightcast™, the average annual salary for credit analysts in the United States is $92,186 [1]. This salary is greater than the average yearly wage for all occupations in the US of $55,640, according to job site Indeed [2].

The actual salary you receive as a credit analyst depends on many factors, such as your location, the type of industry you are in, and the specific employer you work for. The average salary for credit analysts varies significantly between cities in the US. 

Some of the top-paying cities and the average salaries include the following [3]:

• New York, NY: $101,682

• Washington, DC: $77,123

• Wilmington, DE: $76,456

• Boston, MA: $75,899

• Stamford, CT: $75,291 

A few of the top industries for pay are telecommunications, information technology (IT), and consulting, which all pay above-average salaries. Additionally, the amount you will make varies depending on the company you work for within these top industries. Google and PayPal are two of the top places to work in terms of the salary you receive, according to November 2023 data from Zippia. 

It’s also notable that credit analyst jobs currently have a strong job outlook in the US. Based on a report by the US Bureau of Labor Statistics (BLS), in the decade from 2022 through 2032, credit analyst jobs will increase by 8 percent, signaling a steady demand. This growth is greater than the average for all occupations in the US and represents over 27,000 job openings per year [4].

Credit analyst career path

Your career path in this role depends upon the type of credit analyst job you have. The standard career path for credit analyst-related roles at typical companies outside of commercial banks follows that of other finance roles. 

For example, you might start your early career working as an analyst or associate before moving into a senior analyst position. After gaining experience, you might progress to positions like manager, vice president, and chief financial officer (CFO). If you work for a credit rating agency, the career path you experience will likely match this standard one. It typically takes seven to 11 years to move from an analyst role to a vice president or high-level manager role within the credit analyst field. 

Strictly looking at credit analysts at commercial banks, you may choose to remain in the credit industry and pursue senior-level roles. One of the top occupations on this path is portfolio management, which may take around 10 years to reach. Another option is to shift your focus to working with sales, such as being a loan officer or lending agent. 

Education and training

As a credit analyst today, you usually need to attain at least a bachelor’s degree to land your first job in this career. Your degree should relate to business or finance, with various types of degree options such as economics, accounting, finance, statistics, and other related fields.

To boost your resume when pursuing entry-level credit analyst positions, consider gaining relevant work experience in a related discipline. Experience with an accounting role in an accounts receivable-focused position or other credit-related positions offers excellent resume-building experience.  

As you grow in your career as a credit analyst, pursuing relevant certifications allows you to build upon your skill set, learn new disciplines, and work to meet the requirements for higher-level credit-related positions. Depending on the level and type of position, some firms may hire credentialed credit analysts first. A few relevant certifications for credit analysis include:

• Chartered Financial Analyst (CFA)

• Certified Specialist in Credit Analysis (NACA-CSCA) Levels 1-3

• Certified Public Accountant (CPA)

• Certified Risk Certification (CRC)

• Credit Business Associate (CBA)

• Credit Risk Analyst (CRA)

• Certified Management Accountant (CMA)

• Professional Credit Specialist (PCS)

Attaining certifications related to the credit analyst role allows you to showcase to employers that you have the necessary skills in the required disciplines to work in these roles successfully. Certifications may also raise your expected compensation. For example, the average salary for a Chartered Financial Analyst (CFA), one of the top certifications listed, is $115,865 in the US, according to Glassdoor’s February 2024 data [5]. This is well above the average annual salary for credit analysts in general. 

Getting started on Coursera

If you want to build a solid foundation of skills and knowledge that could be valuable for the credit analyst role and other financial positions in general, completing a course or receiving a relevant certificate is a great place to start. On Coursera, you can enroll in top-rated classes from renowned global institutions and organizations. 

For example, check out the Business and Financial Modeling Specialization by the University of Pennsylvania, Wharton School of Business. This course teaches you to create your quantitative models, manage and measure risk, and utilize spreadsheets to handle data for decision-making. Or, if you want to start building skills in behavioral finance and economics, financial markets, and financial concepts, consider relevant courses like Financial Markets offered by Yale University.