If you’re looking for an in-demand finance job, you may want to consider becoming a credit risk management analyst. Since the global economic crisis, businesses have tightened their lending standards for mortgages, loans, and other investments. Credit risk management analysts are mid-level finance professionals who carefully assess the financial history of people and companies to estimate risk of default. It’s their job to evaluate whether applicants will pay back the money borrowed responsibly based on their credit. Increased financial regulatory reform has placed greater emphasis on credit analysis. The Bureau of Labor Statistics predicts that employment of credit risk management analysts will grow by 12 percent through 2024. Below we’ve created a brief job profile to decide if this is the right finance career for you.
What Credit Risk Management Analysts Do
Credit risk management analysts pore over credit data and financial statements for prospective loan applicants to estimate the degree of risk. Typical daily duties include gathering personal information, analyzing credit scores, using underwriting software, highlighting red flags, reviewing repayment history, estimating the probability of default, assessing income, and generating financial ratios. Credit risk management analysts generally compile their findings in written reports for managers to make final lending decisions. In some cases, analysts will work directly with customers to guide them toward successfully opening loans. They may meet with prospective company officials to gain better insight. Credit risk management analysts strive to minimize the institution’s debt risk while maximizing profitability.
Where Credit Risk Management Analysts Work
According to the Bureau of Labor Statistics, there are 69,390 credit risk management analysts working in a variety of settings across the United States. The majority of analysts are employed by depository credit intermediation institutions, including retail and commercial banks. Credit risk management analysts can also find job prospects in investment banks, credit unions, online banks, insurance companies, private equity firms, corporations, automobile dealerships, software publishers, or securities and commodity brokerages. Some analysts are employed by the government, including the Federal Reserve Bank. Credit risk management analysts work full-time in a comfortable office setting with 40-60 hour work weeks. Credit analysis jobs are most abundant in large metropolitans, especially New York City.
How to Become a Credit Risk Management Analyst
Becoming a credit risk management analyst generally requires having at least a four-year bachelor’s degree from an accredited business school. Most analysts have majored in finance, statistics, mathematics, accounting, economics, or business administration. Taking coursework specifically related to credit analysis, bond valuation, risk management, and statistics. If possible, seek banking internships where you’ll learn to evaluate credit histories and assets. For advancement beyond entry-level, earning a master’s degree may be necessary. Attending graduate school for a Master of Science in Finance (MSF) or MBA can springboard your career. It’s also recommended that you pursue the Credit Risk Certified (CRC) credential through the Risk Management Association (RMA) to display your expertise.
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Where borrowers land on the credit scale from 350 to 850 can either increase or decrease the risk of accepting their application. Credit risk management analysts delve into potential customers’ financial pasts to determine their reliability. This lucrative finance career allows credit risk management analysts to bring home an average yearly salary of $75,970. Becoming a credit risk management analyst may also place you on the track to becoming a risk manager, credit manager, cash manager, or controller.
