Credit Risk Reporting Role - Insurance/Banking Industry

CDEDIT RISK REPORTING

- There is a wealth of opportunity available if you're hoping to succeed in a career in the financial sector. Where you end up depends entirely on you along with your goals, education, experience, and drive.

- You may want to consider a role in banking or insurance. Or you may want to dive into the investment world, working as a broker-dealer or portfolio manager. There are also other roles, including accountants and advisors. And this isn't an exhaustive list, because the possibilities are endless.

- But one role that often gets overlooked is that of the credit risk analyst. In this article, we look at this role, what it takes to become one, and how much these professionals command. Keep in mind, though, that although there are many types of analysts in this field, the information in this article is meant to serve as a basic guide to the role.

Key Takeaways:

- A credit risk analyst determines how creditworthy someone is based on their credit history.

- The research that a credit risk analyst conducts ultimately leads to the decision of whether a lender should issue a loan to an applicant.

- Credit risk analysts may also review and rate investments.

- Working as a credit risk analyst often requires an undergraduate degree.

- Individuals often find work in financial institutions, insurance companies, or investment firms.

What Does a Credit Risk Analyst Do?

- The world learned about credit risk analysts during the events that led to the Great Recession. That's because these individuals were responsible for assigning ratings for mortgage-backed securities (MBSs), which were the investments that led to the global financial crisis. But just what does this position entail?

- In the most basic sense, a credit analyst reviews and assesses someone's financial history (an individual or a company) to determine if they are creditworthy. In other words, credit risk analysts determine the risk of default to lenders when they consider issuing loans to their clients. This means that whatever these individuals do has implications for anyone who wants to buy a house, get a loan, or make an investment.

- This kind of analyst does not just provide a recommendation or approve or deny an application, they also often lead to a "yes, but ." answer. Someone seeking a loan may qualify, but with specific conditions, such as a higher or lower interest rate. This often depends on the applicant's repayment history and credit score.