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What Does a Credit Analyst Do?

Evaluating the credit report of an applicant is one responsibility of a credit analyst.
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  • Written By: Ken Black
  • Edited By: Andrew Jones
  • Last Modified Date: 26 September 2014
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A credit analyst is an individual who reviews the creditworthiness of those applying for credit. The analyst may review the worthiness of either individuals or businesses. This individual will usually be trained on the job, but some credit analyst positions may require a college degree in finance, accounting, or a similar field. In many cases, the decision of the analyst will be the final decision on whether or not a loan is approved.

In addition to approving the loan, a credit analyst will also have a great deal of influence in the terms of the loan. The individual may set an interest rate based on certain risk factors. That rate will likely be lower for borrowers who pose a lower risk to the lender, and higher for those who do. The analyst may also set a minimum or maximum term of repayment. This may also be based on financial information received.

Typically, a credit analyst's day is filled with doing research about individuals who are applying for a loan product. This may be talking to employers to verify income. It will also likely involve pulling reports from credit reporting bureaus and looking at the borrower's FICO score to determine the risk the potential borrower may be. The overall goal is to find a solution that will sufficiently protect the lender, yet provide the borrower with the capital that is needed. This verification process may be done online and over the Internet.

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After a decision is made, the credit analyst may then be responsible for transmitting that decision to the client. In many cases, this is done via a letter. Further, the analyst may be off site. If that is the case, the analyst will usually send the information on the decision to the personal banker. That banker will relay the decision to the applicant. Once the decision is made, the applicant may appeal in some situations. The burden of proof will be on the applicant to come up with legitimate reasons why the decision rendered was inappropriate. In most cases, those denied will simply seek loans from another company.

Credit analyst salaries are usually paid per hour. Thus, the earnings potential is based on whether the job is part time or full time. In many cases, an analyst will work full time hours. Entry-level positions may start out lower than someone with many years of experience may make slightly more.

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KoiwiGal
Post 2

@pleonasm - I don't mean to be cynical, but I wonder if they are asked to give loans specifically to people who look like they will take a long time to pay them back.

I mean, the person would still have to be trustworthy, but it is a legal contract, and now even declaring bankruptcy won't help in some cases.

A risk analyst might want the company to have a bunch of people who have to pay more over the long run because they aren't able to finish their payments in the short term.

It seems like they were giving out home loans left, right and center a few years ago, and ended up with payments for a while and eventually a house when people defaulted. So, it makes me wonder.

pleonasm
Post 1

I guess credit risk analysts get given a list of things to look for when they start the job. Like a bad credit history, or defaults on payments, or a low paying job and then they have to match that against the payments.

I always wonder how much leeway they get to make the decision, although I imagine it depends on the company.

Do they look at, for example, the Facebook page of the applicant? If the Facebook page is filled with drunken pictures, would that make a difference?

It might make the person look less trustworthy, that's for sure.

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