What’s the Difference Between a Credit Analyst and a Financial Analyst?
In the finance world, analysts are needed for a variety of reasons. These analysts are specialists in a particular area of financial management and so are their roles anywhere they are hired.
But what’s the difference between a financial analyst and a credit analyst? Below David Smith, a cryptographer from the Smart Card Institute, explains for Finance Monthly.
The job of a credit analyst differs from that of a financial analyst. But they have one thing in common; a prerequisite skill in research and analysis.
A credit analyst has his/her role anchored on credits alone. Basically, the credit analyst is responsible for the vetting of an applicants credit profile to ascertain if the applicant is eligible enough for a grant or loan. In cases where the applicant is not qualified to receive a loan based on his/her previous credit records, the credit analyst offers possible solutions and alternatives to the applicant.
According to masterfinance a credit analyst sources relevant information from files of the applicant relating to his/her credit records and financial habits. When all is verified, the credit analyst can then recommend the applicant to the office responsible for the issuance of loan.
Credit analysts can work in the bank, credit card issuing companies (This is not to be misconstrued with the credit card manufacturers who make use of magnetic stripes in the process. Credit analyst are not into digital hardware but more into finances of a complex nature), credit rating agencies, investment companies and any other financial institution in need of their analytical prowess.
To become a credit analyst, one must need to have bagged a degree in finance, accountancy, economics or related fields.
Financial analysts on the other hand are involved in a more versatile role when it comes to finances. They carry out researches on a broader level. These researches involves a critical survey into the macroeconomic and microeconomic environment around a potential business or sector which can assist the business or sector in making informed decisions on a planned financial step they are about to take.
For instance, if a company decides to make its shares in equity available for the public to come invest in, they will need a financial analyst to look at the possibilities involved in the proposed venture and pre-tell the outcome. This will enable the company make the right decisions.
They are also required most times to forecast the financial future of a business judging from certain parameters on ground. This calls for a more detailed research and results.
Financial analysts can work anywhere the traffic in finances is massive unlike the credit analysts. Financial analyst can fit into just any business space and help business owners make decisions from the backdrop of options and findings.
To become a financial analyst, one must obtain a degree in either math, accounting, economics, finance, business management or related fields. Other fields that are likely going to give one an edge in the hiring table are: computer science, physics and engineering. Becoming a chartered financial analyst is the peak of the qualifications followed by an MBA in same field. Companies generous enough can train their staff on financial management and analysis.