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The Complete Guide to Becoming A Credit Analyst
What you'll really do, what you'll really earn, and whether you've got the temperament to last a decade in the numbers game
by Alumigogo Books
Chapter 1: What Does a Credit Analyst Actually Do?
What Does a Credit Analyst Actually Do?
Let's clear up the first misconception right away: a credit analyst is not a glorified data-entry clerk, and they are not a psychic fortune-teller. The core of the job is assessing the likelihood that a borrower will pay back a loan, and then putting a number, a letter grade, or a 'yes' or 'no' on that assessment. You are the person who tries to see the future by looking at the past and the present. Your tool isn't a crystal ball; it's a financial statement, a credit bureau report, and a deeply ingrained sense of skepticism.
You will spend the majority of your day reading and interpreting financial documents. If a business wants to borrow $500,000 to buy new equipment, you will pull their tax returns, their bank statements, and their accounts receivable aging report (a fancy list of who owes them money and how late those payments are). You will compare their numbers to industry benchmarks. If a retail store's inventory is turning over (selling) much slower than the industry average, that is a red flag you need to investigate. You are looking for the story behind the numbers. Is this a seasonal hiccup, or a sign that they are stocking products nobody wants anymore?
For consumer credit, the process is more automated, but the analytic thought process remains. You might be reviewing a mortgage application where the applicant has a credit