Although the names are quite similar, credit analysts and financial analysts have very different jobs. As indicated by their titles, both positions require strong research and analytical skills. Accounting and finance are the general fields of study for those who pursue both positions. Nevertheless, there are notable differences between the required educational background and the day to day tasks and objects of credit analysts and financial analysts.
Job Duties of Credit Analyst vs. Financial Analyst
Credit analysts have the general responsibility of assessing a loan applicant’s credit-worthiness. In the scope of their position, they are required to gather relevant data and, based on the data, recommend a course of action for the credit application. Analysts who work for institutions that issue credit cards must research whether the applicant has defaulted on past loans or lines of credit. The analyst will then make a recommendation that may include extending a line of credit, limiting a credit line, denying credit, or closing the applicant’s account.
Financial analysts conduct research on a larger scale. They research the macroeconomic and microeconomic conditions that surround potential business, industry, and sector decisions. A decision is typically made based on the research findings. An example is the decision to purchase or sell a company’s stock. Financial analysts must remain aware of the conditions in the area in which he or she specializes, and they sometimes are required to build financial models to predict future conditions under a given scenario.
Education Background of a Credit Analyst
Credit analysts are generally required to have completed a bachelor’s degree in finance, accounting, or a related field. Some potential employers do not require a degree in finance; therefore, majoring in finance is not required, though it may certainly come in handy. Companies also often provide on the job training to employees who do not have an accounting or finance-related degree, though most employers require some work experience in accounting or finance or a graduate degree in a related fields. Some credit analysts are required to have a Chartered Financial Analyst designation depending on the level of the position.
Education Background of a Financial Analyst
Financial analysts tend to have taken business, math, accounting, and economics classes during their undergraduate study. Unrelated majors that are favored include engineering, biology, computer sciences, and physics. Many junior analysts have a background in these areas while senior analysts tend to be hired shortly after completing MBA school. Others who come from non-MBA or other favored fields of study may wish to consider participating in the Chartered Financial Analyst program or sitting for the Series 7 or Series 63 exams.
While credit analysts tend to focus their analysis on individual consumers and companies, financial analysts mainly research market and industry trends. Nevertheless, both professions require important financial decision-making. While those who tend to pursue both jobs often come from similar backgrounds, the financial analyst career may be more flexible for those who wish to work in the field, but may not have studied an finance or an accounting-related subject.
