5 Roles Of A Credit Analyst


What a credit analyst does is mainly related to gathering and analysing financial data about clients. These professionals are tasked with evaluating the data and recommending a course of action. 

A credit analyst will assess a number of factors, in order to decide whether or not a customer is likely to default on payments or not. 

To qualify and pursue a career in this field, a professional requires a bachelor’s degree in finance and accounting. This profession also requires aptitude in ratio analysis, basic accounting and other skills. 

Furthermore, one is required to have quantitative skills, along with knowledge of industries. This is because as a credit analyst, one may need to have an understanding of various sectors. Being apt at multitasking also comes in handy. 

Knowledge of financial software also helps. 

Credit analysts are sought out by organisations as their roles are essential in order to mitigate risk. 

More roles of a credit analyst: 

Scrutinises repayment history 

A credit analyst will look at how well individuals have been paying their other creditors. 

Look at profitability of businesses 

This forms part of trend analysis. A credit analysis will look at how likely it is for a business to be profitable. 

Use of financial ratios to analyse financial stability 

Ratio analysis is an important part of credit analysis. Net cash flow is used as a main indicator of financial stability or instability. These analysts will also examine factors like profitability, efficiency and liquidity. 

Analyse 5Cs 

Analysts will look at factors like character, collateral, conditions, capital and capacity, before making recommendations. This is one of the most important roles of a credit analyst. 

Analysis of cash flows 

The movement of cash within a business is a major factor to consider for credit analysts. 


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