The iMocha Guide to Assessing and Hiring Credit Analysts

According to indeed.com, credit analysts earn approximately 19 dollars per hour in USA, whereas the median salary range starts from 7 dollars per hour. Compared to the average income of 2000 dollars a month, credit analysts earn significantly more. 

The demand for the role of credit analyst as well as the number of interested and eligible candidates has increased in the last few years. 

Traditionally, a candidate with good data analysis and risk assessment skills along with a strong financial and legal background was considered good enough to be a credit analyst. But these days, due to digital transformation, candidates are also expected to have programming skills.  

To find a person with so many different skills is, therefore, a challenge for a recruiter. 

At the same time, investment and commercial banks, credit card lenders, and rating agencies are constantly looking for good credit analysts. Critical investments hinge on their expertise. Credit analysts are always in demand in financial firms like KPMG, Ernest and Young, Deloitte, and PwC.  

But in this new world of remote work, how do these firms adjust their hiring processes to bring good credit analysts onboard? We put together this short guide to answer exactly those questions.

Before you start hiring, it is important to understand the key job functions of a credit analyst. Credit analysts assess the risk of lending money to the clients, whether they will be able to repay the loans or not. To do so, they have to evaluate the financial data and statements of the clients to check legitimacy. Using computer programs, they have to produce financial ratios to evaluate financial status.  

They also perform a critical role of obtaining credit information of clients through credit associations and references, and fill out loan applications, and submitting them to the loan committee. Apart from this, they help other departments with their finances, for example, making payments, regulating their credit exposure, avoiding financial customer disputes, etc. 

To hire credit risk experts, clarity of finance skills and qualifications that need to be assessed is required to design or select an assessment suitable for freshers as well as experienced candidates.  

The key skills and qualifications required are: 

• A bachelor's degree in finance and accounting is enough but their finance skills should be backed by a strong knowledge of data interpretation and research skills. 
• Along with proficiency in MS Excel, they also need to know how to use software to analyze numbers and conduct a quantitative analysis by creating a set of numbers and understanding what they mean.  
• Candidates are expected to be very detail-oriented, be able to multitask when working on several projects, and maintain accuracy. Candidates should be able to see beyond the obvious to spot the real risk of credit. 
• Credit analysts also need industry-specific knowledge; for example, if they are working in the retail industry or automobile industry, they need knowledge of the future trends to help the employers make financial decisions. 
• Credit experts may not have to personally interact with customers but should know how to write excellent finance reports to justify the analysis of creditworthiness. 
• A Chartered Financial Analyst certification is an added advantage to back the experience. 

How to assess these skills?  

With iMocha’s online skill assessments, testing the finance skills of candidates has become easy for recruiters. You can use credit risk analyst test, which focuses on important credit analyst skills such as risk mitigation, credit rating, position analysis, and credit risk management. Also, credit analyst assessment test, financial accounting tests, financial relationship manager tests, or any other analytical skill assessment helps in evaluating a candidate applying for a job in the finance sector. 

These tests include questions on all the necessary topics for the assessment of a credit analyst such as accounting principles, journal entries, ledgers entries, trial balance, profit & loss statement, balance sheet, provisions depreciation, cash flow inventory, and valuation ratio analysis.  

However, just a financial accounting skill assessment will not address all your questions about the eligibility of the candidate. You’d have to assess their soft skills as well.  

Important credit risk analyst interview questions you can ask:  

• Situation-based questions: About maintaining a balance sheet, describe a company and ask them if we should offer them a loan or not, or after lending a certain amount if they observe a risk, how would they handle it, etc.  
• Behavioral questions: Ask them how they would communicate about a risk they discover, or about an instance in their previous organization where they tactfully handled any situation. 
• Questions specific to a job role: You can ask technical questions related to the software they use and how they work with a team, etc.  

Over the decade, the expectation of finance skills from a candidate has changed, and that’s why most organizations conduct on-job training for every newly hired employee, whether fresher or an experienced candidate. You can also provide financial aid to them to undergo specific certification programs for credit analysts.