Credit analysis is a specialist area of financial risk analysis. Credit analysts (a.k.a. credit risk analysts) are tasked with assessing and evaluating the risk of companies making financial loans proposals to retail and commercial customers.
Sometimes these guys might be responsible for providing expert guidance on credit risks linked with large-scale corporate lending schemes, which involve millions and millions of pounds.
If you enter this profession, you’ll be reviewing and analysing financial statements, annual reports, management accounts, profit and loss statements, cash and asset inventories, financial data updates from Reuters and other relevant information made available by market research agencies.
Furthermore, you’ll be developing mathematical and statistical models for forecasting credit risks in a variety of situations. You’ll also be taking various other things into account, such as anticipated environmental changes, legislation, market movements, annual performance results of blue-chip and benchmark companies, and compliance with statutory and regulatory requirements.
Credit analysts are usually employed by banks (commercial and investment), private equity firms, investment funds, credit rating agencies, non-banking financial institutions, stockbrokers and financial consulting firms.
You can find current vacancies on our Jobs page in the Banking, Finance and Accountancy sector.
Salary & benefits
Credit analysts in the early stages of their careers can earn salaries ranging from £20,000 to £50,000 per annum.
As you gain more experience, your annual salary could rise to between £50,000 and £100,000. Some senior financial risk analysts can even earn up to £250,000 a year.
Most financial services companies also pay attractive bonuses, which are based on performance and achievement of targeted objectives.
The average working day for a financial risk analyst ranges between eight and 14 hours. You may also be required to work extra hours during critical situations or when deadlines are looming. Pressure levels are intense, especially in corporate finance and investment banking.
Credit analysts are mainly office-based, but may occasionally travel to inspect companies that are being considered for investment or are extending their loan facility.
To enter this profession, you’ll need a solid undergraduate degree (2:1 minimum) in any discipline, as well as strong grades at GCSE and A-level.
Many employers prefer candidates with degrees in numerate and quantitative subjects, such as finance, business, economics, statistics, maths or accountancy.
Knowledge of a second language and a background of relevant experience through vacation or industrial training placements are also recommended. In fact, many employers conduct internship programmes with the objective of identifying potential talented candidates.
Training & progression
The majority of your training will be done whilst on the job, but may also include formal training sessions across multiple functions and departments. Some employers may also sponsor you to take industry examinations to obtain professional qualifications.
Career progression is driven by performance, experience and acquisition of professional qualifications. Employees with consistently high levels of performance may be eligible for promotion every two to three years.
When you reach the top of the career ladder, you will be working at senior manager or managing director level. Credit analysts can also move laterally into front-end roles, such as traders or investment managers.