Salary, Job Description, How To Become One, and Quiz
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Credit Analysts
Credit Analysts analyze credit data and financial statements of individuals or firms to determine the degree of risk involved in extending credit or lending money. Prepare reports with credit information for use in decisionmaking.
Table of contents
What they do
Credit Analysts analyze credit data and financial statements of individuals or firms to determine the degree of risk involved in extending credit or lending money. Prepare reports with credit information for use in decisionmaking.
- Analyze credit data and financial statements to determine the degree of risk involved in extending credit or lending money.
- Generate financial ratios, using computer programs, to evaluate customers’ financial status.
- Consult with customers to resolve complaints and verify financial and credit transactions.
- Prepare reports that include the degree of risk involved in extending credit or lending money.
Typical day
On a daily basis, Credit Analysts analyze financial data such as income growth, quality of management, and market share to determine the expected profitability of loans. They prepare reports that include the degree of risk involved in extending credit or lending money.
A typical day for a Credit Analyst will also include:
- Complete loan applications, including credit analyses and summaries of loan requests, and submit them to loan committees for approval.
- Consult with customers to resolve complaints and verify financial and credit transactions.
- Review individual or commercial customer files to identify and select delinquent accounts for collection.
- Generate financial ratios, using computer programs, to evaluate customers’ financial status.
- Analyze credit data and financial statements to determine the degree of risk involved in extending credit or lending money.
Other responsibilities
Besides their typical day, Credit Analysts also review individual or commercial customer files to identify and select delinquent accounts for collection. They may also analyze credit data and financial statements to determine the degree of risk involved in extending credit or lending money.
On a weekly to monthly basis, Credit Analysts confer with credit associations and other business representatives to exchange credit information. They might also generate financial ratios, using computer programs, to evaluate customers’ financial status.
In addition, they compare liquidity, profitability, and credit histories of establishments being evaluated with those of similar establishments in the same industries and geographic locations.
Although specific duties may vary, many of them evaluate customer records and recommend payment plans, based on earnings, savings data, payment history, and purchase activity.
To some Credit Analysts, it is also their responsibility to prepare reports that include the degree of risk involved in extending credit or lending money.
Freedom to make decisions
How much decision making freedom does this job offer?
Structured vs unstructured work
To what extent is this job structured for you versus allowing you to determine your own tasks, priorities, and goals?
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What is the job like
Job satisfaction
Is this job meaningful
70% said they were satisfied with their job and 37% said they found their job meaningful.
The particular group I was in largely focused on quarterbacking prospective transactions as a debt investment for Citigroup. Generally speaking, a client would have a funding need, and when the need was for debt, it was our job to create financial models and complete a diligence process to determine whether or not it was something we could invest in and/or syndicate to other banks as participants in an offering.
The building of MUFG at 6th and 49th
As an analyst, depending on how senior you were (A1, A2, or A3, with A3 being the most senior), your responsibilities would consist of different things. A3s could be staffed on any range of the following:
- Inputting historical financial data into a model to prepare for projection scenarios (commonly referred to as “spreading”)
- Creating projection scenarios based on various macroeconomic sensitivities and company-specific sensitivities
- Running various analysis and debt capacity models to see the effect of different financing structures on the company’s ability to repay debt
- Creating internal memoranda outlining the various scenarios, assumptions considered in each, and overall analysis, conclusions, and ultimate recommendations
- Participate or lead internal discussions with deal committees and risk personnel surrounding the investment in the debt facilities
- Review and assist in drafting legal documentation (credit agreements)
- Determine appropriate risk-adjusted pricing utilizing credit rating models comparing the prospect company to large historical data sets of other companies which takes into consideration statistical probability of default and loss given default (“PD” & “LGD”)
Depending on the time available to complete the transaction (often shorter notice than not), hours worked could vary between 60-80 hours on a normal level of deal flow, however could push into the 100 hour mark during busier times and depending on the complexity of transactions.
Pros
Incredible amount of learning potential: As an investment banking analyst you become privy to the inner workings of sophisticated financial transactions. Ranging from straightforward debt refinancings to acquisition financing to bankruptcy processes, the amount of technical knowledge in addition to business acumen required to properly analyze a particular situation is immense. Given this is your job, you will be required to learn all of it.
Broad exposure to a variety of businesses in different industries: As part of your analysis, you will need to understand the drivers of both revenues and expenses of a company. In order to understand a business, you must understand how and why it sells things, and the same for why it is able to be profitable and generate cash flow. Depending on your group focus, you can gain exposure to various industries if you are in a group that is not in a silo (i.e. Technology, Media, and Telecom “TMT,” Industrials/Diversified, Leveraged Finance). For example, at MUFG, I worked on a transaction related to a major cruise line one week, where the next I worked on a company that sold commercial carpet tiles.
Very steep slope to financial modeling: In banking, you will either sink or swim. Meaning you are expected to perform at extreme performance levels or be fired. Your interview process (which will be highly demanding, require you to have top credentials and “fit” the type-A profile) should not be viewed as a hard test to pass and be done with before you “get in,”, but rather the tip of the iceberg in terms of what it will be like on the actual job. If you land a job here, you will find yourself pushing the limit on the breadth and depth of learning like never before. Because financial modeling is literally the foundation of every single thing a bank does, (keeping) the job depends on your ability to learn and execute. As such, assuming you do not get fired, you will become a world class expert on financial modeling and understand businesses better than 99.9% of other people.
Company-paid dinners: If you work or intend on working past 8PM (some banks differ the time), generally you will be provided a company-paid dinner. If you work past 10PM, some companies let you expense a car service home.
Cons
Long hours: Investment banking is notorious for long working hours. This is not ideal if you plan on having any sort of normal life outside of work.
General complete loss of work/life balance: Referencing the long hours above, depending on how busy your group is and the complexity of your transactions, you may find yourself working 80-100 hours per week. At that rate, it becomes literally impossible to do any other activities outside of working and sleeping (and, of course, commuting to both of those activities).
High stress: In reference to the “sink or swim” dynamic above, banking roles are constantly pushing you to your limits and the expectations only increase as you gain more experience. Additionally, the work is frequently very fast paced, with limited time or resources available to help you learn.
Competitive pressure from colleagues: Because analysts get ranked relatively to one another (which determines monetary compensation levels in forms of year end bonuses), you are constantly being compared to your peers.
Joseph Ali
Joseph worked on coverage teams as an analyst (Leveraged lending then distressed oil & gas @ Citi, investment-grade diversified industries then later leveraged lending again, eventually becoming an associate covering Technology, Media & Telecom @ Mizuho before leaving to work on Fireflies full time.
Pros
Suitable for people who like to follow routines.
Suitable for people who value relationships between co-workers and customers and want to work in a friendly non-competitive environment.
This career is perfect for people who love to work indoors.
Very high salary (top 25% highest paid careers).
Normal working hours (40 hours per week).
Cons
Not suitable for people who like to work with designs.
It is hard to get into this career. A considerable amount of work-related skill, knowledge, or experience is required for this career.
How much do they make
Average salary
Average hourly wage
Entry-level Credit Analysts with little to no experience can expect to make anywhere between $44,250 to $56,120 per year or $21 to $27 per hour.
| Salary by experience | Annual | Hourly |
|---|---|---|
| Highest (Top 10%) | $146,690 | $71 |
| Senior (Top 25%) | $103,840 | $50 |
| Median | $74,970 | $36 |
| Junior (Bottom 25%) | $56,120 | $27 |
| No experience (Bottom 10%) | $44,250 | $21 |
This table shows the top 10 highest paying industries for Credit Analysts based on their average annual salary.
| Salary by industry | Annual | Hourly |
|---|---|---|
| Monetary Authorities-Central Bank | $122840 | $59.06 |
| Securities, Commodity Contracts, and Other Financial Investments and Related Activities | $118340 | $56.90 |
| Insurance Carriers | $93870 | $45.13 |
| Natural Gas Distribution | $93570 | $44.98 |
| Business Support Services | $93080 | $44.75 |
| Management, Scientific, and Technical Consulting Services | $90710 | $43.61 |
| Software Publishers | $88660 | $42.63 |
| Management of Companies and Enterprises | $88080 | $42.35 |
| Automotive Equipment Rental and Leasing | $86810 | $41.74 |
| Agencies, Brokerages, and Other Insurance Related Activities | $85970 | $41.33 |
View more salary by industries here.
Where can they work
Where can Credit Analysts work? Here is a table showing the top 10 largest employers of Credit Analysts including the average salary in that industry.
| Employers | Total Employed | Annual Salary | Hourly Wages |
|---|---|---|---|
| Credit Intermediation and Related Activities | 30180 | $84330 | $40.54 |
| Nondepository Credit Intermediation | 13010 | $83900 | $40.34 |
| Management of Companies and Enterprises | 9710 | $88080 | $42.35 |
| Securities, Commodity Contracts, and Other Financial Investments and Related Activities | 5900 | $118340 | $56.90 |
| Merchant Wholesalers, Durable Goods | 1060 | $69000 | $33.17 |
| Insurance Carriers | 940 | $93870 | $45.13 |
| Business Support Services | 910 | $93080 | $44.75 |
| Professional and Commercial Equipment and Supplies Merchant Wholesalers | 820 | $74550 | $35.84 |
| Merchant Wholesalers, Nondurable Goods | 510 | $68260 | $32.82 |
| Automobile Dealers | 500 | $83320 | $40.06 |
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What is the work day like
Working hours
Working schedule
Work with group or team
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Deal with external customers
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Manage or lead others
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Telephone
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Group discussions
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Public speaking
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Frequency of conflict situations
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Dealing with angry people
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Dealing with physically aggressive people
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Level of competition
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Repetition in this job
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Impact of decisions on co-workers or company results
What results do your decisions usually have on other people or the reputation or financial resources of your employer?
Frequency of decision making
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Responsibility for others’ health and safety
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Responsibility for outcomes and results
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What is the work environment like
Office-style environment
Indoors in an environmentally controlled condition
Warehouse-style environment
Indoors in a non-controlled environmental condition such as a warehouse
Outdoors
Outdoors exposed to all weather conditions
Outdoors – Under Cover
Outdoors but under cover (e.g. structure with roof but no walls)
How to become one
Difficulty to become one
Required level of education
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Relevant work experience
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On The Job Training
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Should you become one
Best personality type for this career
People with this personality type likes to follow set procedures and routines. They prefer working with data and details more than with ideas.
People with The Builder personality type likes practical and hands-on work. They prefer working with plants, animals, and real-world materials like wood, tools, and machinery.
People with The Thinker personality likes to work with ideas that require an extensive amount of thinking. They prefer work that requires them to solve problems mentally.
People with The Artist personality likes to work with designs and patterns. They prefer activities that require self-expression and prefer work that can be done without following a clear set of rules.
People with The Helper personality type likes to work with people and in teams. They prefer work that allows them to build relationships with others.
People with The Leader personality likes to start and work on projects. They also like leading people and making many decisions.
People with The Organizer personality type likes to follow set procedures and routines. They prefer working with data and details more than with ideas.
You can read more about these career personality types here.
People who are suitable for this job tend to like following set procedures and routines. They like working with data and details more than with ideas.
They also like starting up and carrying out projects. They like leading people and making many decisions. Sometimes they require risk-taking and often deal with business.
Take this quiz to see if this is the right career for you.
Work Values
Which values are the most important to a person’s satisfaction for this job?
You are someone who is results oriented. You prefer work that allows you to utilize your skills and abilities while at the same time giving you a sense of accomplishment.
You are someone who values job security, steady employment, and good working conditions. You also prefer work that keeps you busy all the time with something different to do every day.
You are someone who values job advancement and leadership roles. You prefer work that receives recognition for the work you do and jobs that are looked up to by others in the company and your community.
You are someone who likes to provide a service to others. You prefer a work environment where you can work with your co-workers in a friendly non-competitive environment.
You are someone who values a company that stands behind their employees. You prefer a work environment where everyone is treated fairly and is being supported by the company.
You are someone who likes to work on your own and make your own decisions. You prefer work that requires little supervision and are allowed to try out your own ideas.
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