3 Steps How To Become A Credit Analyst

(doylc.com) How to Become a Credit Analyst - A credit analyst collects and analyzes financial data about customers. This data may include a customer's payment history, earnings, savings, and purchase activity. Once the data is collected, the analyst evaluates the information and recommends what to do next with their client. Analysts work for banks, private companies, retail customers and customers looking for new credit. Educational requirements may vary depending on the hiring client, but typically a minimum of a bachelor's degree in finance, accounting, or a related field is required.

• How to get the right education credit analyst

Find a bachelor's degree in the right fields. Companies that hire credit analysts prefer that you have a degree specializing in one or more of several areas including: accounting; finance; relationship analysis; Statistics; Business; Calculus; balance sheet analysis; and risk assessment. Combinations of these topics are necessary to assess a customer's business environment. Look for accredited programs in your area that offer degrees in these areas.

Look for schools with part-time study opportunities. Credit analysis is a job that relies heavily on experience and financial education. Ask the school(s) you are interested in if they offer internships or work with local companies for hands-on experience. This can also be beneficial for a job placement later on.

take finance courses. Make sure your degree includes many courses that cover the right materials. You should take courses such as management accounting, managerial economics, fiscal policy, monetary policy, financial management, money markets, capital markets, capital budgeting, financial investment analysis, portfolio management, options analysis, financial derivatives, econometrics, and quantitative analysis.

work during school time. Get a finance job regardless of whether the school offers you a finance job opportunity or not. Look for job openings at local banks, securities firms, or see if your school has an employment agency. Are you looking for positions in accounts receivable, bookkeeping, loan application processing or similar. These jobs can add to your financial data experience and complement your resume for later applications.

• How to obtaining the right certifications credit analyst

Get your credit analyst certification. This is not a requirement, but is sometimes preferred by employers even after an analyst has a bachelor's degree and work experience. Training and the actual test can be found at the National Association of Credit Analysts (NACA). You must complete 12, 24, or 36 hours of online courses that cover the basics of credit analysis, pass a background check, uphold ethics, and be a full member of the NACA.

The reason for the difference in hours depends on the analyst's increasing experience and the desired higher level of certification (three levels available).

NACA also has job openings for credit analysts.

Become a Chartered Financial Analyst. Becoming a Chartered Financial Analyst (CFA) is a coveted mark of integrity and competence for financial analysts. CFA designations require passing a three-tier test that covers accounting, economics, ethics, money management, and security analysis, among others. You must already have a bachelor's degree and four years of experience in a finance career. Then apply through the CFA Institute. At the CFA Institute, you can work during the program before you take the exams.

The program can last four years, with six months of preparation typically required for each exam.

CFA sometimes allows you to meet the four-year admission requirement if you combine experience and education. This assumes the financial work was a full-time job.

Become a credit business partner. Earning the Credit Business Associate (CBA) designation is achieved through coursework completion or approval by the National Association of Credit Management (NACM). Being a CBA can help land a job in the credit management industry.

Take courses to become a CBA. These courses focus on basic financial accounting, credit principles and balance sheet analysis. Certificates of successful completion (Class C or better) are submitted to NACM along with a three-hour exam (125-150 questions), application (including educational background), resume, and career plans to earn the CBA designation.

NACM exam questions are typically true/false and multiple choice. Sometimes the exam also requires the applicant to prepare a mock balance sheet or other financial document. Applicants must get 70 percent correct to pass. The test is conducted three times a year: May, July and November. Study guides and practice tests are available through the NACM website.

Some of the current fees include $225 for NACM members and $325 for non-members for the application - including the exam. Retaking the exam costs $55. There is a fee of $175 for members or $275 for non-members to create a NACM personnel file within their national education department.

No work experience is required to become a CBA.

Earn the credit business associate designation. The Credit Business Fellow (CBF) designation builds on NACM's CBA certification, but adds knowledge of business/credit law to your professional repertoire. CBF registration fees are $275 for NACM members and $425 for non-members. CBF exam retakes cost $80. The Certified Credit Executive (CCE) designation builds even further on the NACM CBA and CBF designations, but represents considerably more experience and breadth of knowledge – 10-15 years of professional financial work.

Note that there is no practice test for CCE. Registration fees are $375 for NACM members and $525 for non-members with mandatory recertification every three years (up to age 60 or up to age 55 and retirement) and cost $150.

• How to working the job credit analyst

Try tasks that help individual customers. Credit analysts do many jobs for their clients every day. Once you have acquired the skills, you will evaluate credit data, process financial statements, determine credit risk and fill out credit documents. For other clients, you can analyze reports to recommend payment plans and share credit information between clients and agencies.

For example, you can get a job at a bank where you have to regularly approve (or deny) loans to residents. You can then be responsible for filling out the loan documents on the bank's side.

Executing orders for commercial customers. For commercial clients, you can generate financial metrics using computer programs, help improve commercial supply chains, manage sales and marketing departments, ensure companies make payments on time, and reduce credit risk. On the service page, you can engage in verifying transactions and handling disputes. Sometimes you will do this alone, and sometimes in teams.

For example, you may get a job at a credit union and be responsible for handling all disputes faced by workers at a local clothing manufacturer. Here you can use the Industry Learning Skill.

Look for employment in the right areas. A broad education in finance has prepared you for work in many areas as a credit analyst. You can search for positions including: deposit brokerage; analysis of trade credits; Credit brokerage without deposits; administration of businesses; monetary authorities (banks); landlords of real estate; financial investment activities; Arranging and arranging of securities and commodity contracts; insurance related activities; automobile manufacturers; Car dealer; auto credit and loan departments; credit departments of retail stores; and other credit departments of the company. Use the job exchanges of the certification bodies.

Be diligent at work. Credit analysts must be conscientious or pay attention to detail. You must ensure that no numbers, banknotes, financial statements or the like are missing from any report or statement of income. You must keep accurate records of payments and cash flows so that your recommendations are based on complete information about your customers.

Improve your quantitative analysis skills. This is your ability to understand sets of numbers. You are presented with many records on a daily basis, from credit reports to payslips to purchase histories and the like. You must be able to look at these numbers and use your financial education to interpret the data.

Write and speak clearly to people. This should be done inside and outside of your finance department. This is especially important for those who don't understand financial jargon. While the bosses of your financial company may understand business terms, your client may not understand them at all. You need a way to translate complex financial charts and analysis into simply worded explanations - spoken or written.

Get to know other industries. This helps with financial data that may be important for certain companies, such as energy or textiles. When you receive credit data from specific financial sectors of the economy, you want to know how it works in order to apply your recommendations in a way that is practical for that sector.

An example of this could be the oil industry. When you're doing a credit analysis for an oil company, you want to understand their production methods better so you can recommend changes that take into account the refining process, drilling costs, environmental conditions, and political situation.

Be ready for multitasking. Completing projects efficiently is a good skill for a credit analyst. You probably have many clients with numerous financial reports to process. You must decide which client has the most pressing deadline, which will take the longest, and balance the workload with the time you have to work with each client.

Work with financial software. Experience with financial software is also of great importance now. Common spreadsheet software tools like Microsoft Excel, presentation software, online meeting tools, and mobile apps are good technologies to learn about. You will be able to keep up with large amounts of financial data, organize it and communicate more effectively to many people.

Many of these software packages have tutorials that are worth working through if you are not at all familiar with the program.

Many of these programs also have versions for "Home", "Office" or "Professional". These have various enabled features and may be limited in time to use them. Ask your employer if you can take a copy of the better version home with you.

Apply for a job. Include your education, financial experience, and certifications on your resume. Submit these in your jobs when you apply. Apply to banks, securities firms, real estate firms, car dealerships, department store home offices, credit rating agencies and search online job boards for similar positions. Describe your skills in more detail in your cover letter. Submit your school reports and references upon request.

The US Bureau of Labor Statistics (BLS) projects that overall positions in the financial sector will increase by 10 to 20 percent between 2004 and 2014. Salaries vary widely by state, but range from $60,000 to $100,000.