Credit analysts are tasked with assessing the credit ratings of people or companies after they have applied for credit and must determine the likelihood of a borrower repaying their financial obligations. The role is a highly responsible one, as employers put a lot of trust in the decisions made by credit analysts.
A credit analyst must be able to combine the complexities of financial market conditions with the operations of customers financial statements. As companies look to remain profitable whilst also avoiding large risks in the new financial climate, good credit analysts are highly valued by financial institutions both large and small.
As an employer, you must ensure that your chosen credit analyst is proficient at deciphering financial statements, evaluating metrics and understanding profitability ratios. They also need to be diligent, communicative and adaptable.
These are the questions you should ask in an interview when hiring a credit analyst.
1. What are the processes you follow when considering a customer’s suitability for credit?
When a candidate answers this question, you are instantly given an insight into their day to day processes. Compare how the candidates practices differ to yours and where similarities lie. Does your candidate:
- Look in depth into the financial history and current habits of a potential client?
- Consider the current financial market and any emerging concerns in their decisions?
- Do anything differently that you could use to improve your process?
The candidate's answer to this question should give you a good idea of how they work day to day and whether they can bring anything to the business that could help to improve your systems.
2. Can you explain what technical expertise you possess in regards to credit analysis?
This is a chance for a candidate to show off the specific skills they have developed in regards to credit analysis, risk, and valuation.
The right candidate will be able to demonstrate a strong understanding of portfolio analysis tools, as well as the Value at Risk (VAR) technique and the Potential Future Exposure (PFE) measure.
3. Do you believe that a credit analyst needs to posses strong interpersonal and communication skills?
Analytical thinking is a vital skill all credit analysts must possess, but this is not that only skill needed to succeed in the role.
It’s vital that your candidate understands the importance of interpersonal and communication skills. A credit analyst will be regularly communicating with internal and external representatives regarding credit information. They may also be required to meet clients in person to answer queries, solve problems and respond to complaints.
Does your candidate understand the importance of these skills, and can they demonstrate examples of having used them?
4. Tell me what you know about us.
Credit analysts must be highly skilled in researching information and backgrounds of potential clients. A great way to see how proficient they are at this is to ask what they know about you. Try and decipher if they understand what your business is about; it’s ethos, culture and values.
You want your candidate to have done their research – see if they can answer these questions:
- What products does your company trade in?
- What portfolios does your company manage?
- What is your company's average client like?
You’ll be able to get a feel from this question as to whether your candidate is someone who does their research – a skill that’s vital for credit analysts.
It’s also important to ask candidates questions about their problem-solving abilities, how they work as part of a team and their basic knowledge of financial markets.
Good credit analysts are hard to find, but the right candidate for the role will stand out. When it comes to hiring a credit analyst, don’t settle. They are so important to the profitability and risk management of a business that you must ensure that they tick all the boxes.
Our offices are in a prestigious Central London location near Liverpool Street, so if you’re in the area you could pop in to speak to us. We’ll be more than happy to help.