Job description for a credit risk analyst

Written by faith davies
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The overall field of financial analysis is predicted to grow by 34 per cent through 2016, resulting in the creation of 75,000 new analyst positions. Credit risk analysts are one of the many types of financial analysts.

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Function

Credit risk analysts are responsible for developing methods used to predict how likely a person or company who borrows money from a financial institution is to default or not pay a loan.

Features

Credit risk analysts use probability and statistics to analyse existing data from customers at a financial institution in order to develop formulas to predict the likelihood that a new client in a similar circumstance will be able to pay. From this analysis, credit risk analysts develop scoring systems for relating people and businesses who apply for loans and conduct tests to ensure these systems remain useful and accurate.

Effects

The underwriters who make decisions about whether to pay or deny a loan use the scoring systems developed by credit risk analysts as part of the criteria in the loan decision process. For large corporate loans, credit risk analysts may visit the potential to borrower to learn about their business and then advise the underwriter what risk model or scoring system suits that company.

Education

The minimum education requirement for credit risk analysts is a four-year bachelor's degree in an area like finance, economics, statistics or mathematics. Some credit risk analysts hold master's or doctorate degrees in their field.

Compensation

In October 2009, the average annual salary range for credit risks analysts was between £23,145 and £60,628, according to Payscale.com

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