10 Credit Analyst Interview Questions and Answers

Credit Analyst Interview Questions and Answers

This section covers commonly asked and expert level Credit Analyst Interview questions and answers. The types of questions covered are general, behavioral, situational and experience based. You can also find interesting examples and sample answers with each question.

Who are these Credit Analyst Interview Questions useful for?

General and behavioral questions on credit risk analysis will be very useful for candidates wanting to take up a career as a Credit Risk Analyst or Credit Analyst at a bank or a corporate.

Video : Credit Analyst Interview Questions and Answers

1. What is Credit Analysis?

Credit Analysis is the process of getting together the financial information about a customer and evaluating it to assess their ability to repay a loan or credit amount, they have applied for.

To do this, various ratios are calculated and compared with the industry standards to ensure that while the customer gets the loan, the lender is adequately protected.

The amount of credit, tenure, interest rate etc. is calculated based on the financial history of the customer.

The customer may be an individual or a company.

2. How is a Credit Analyst different from a Loan Officer?

These two are very commonly confused positions. The two may look similar but they are very different.

While a loan officer helps the customers through the process of procuring the loan like explaining them various options, assisting with various documents etc., a Credit Analyst studies their case and decides if they can actually be granted the loan, its terms and conditions like period, interest rate etc.

3. What are the important responsibilities of a Credit Analyst?

Your answer to this question, tells the interviewer, if you are aware of the responsibilities you’ll need to discharge in this role, your capability, readiness and commitment.

Make sure that you have read the job description well and are prepared to answer the questions. Some of the things that you can talk about are:

i) Assess credit requests - new, changed, requiring refinance, annual due diligence.

ii) Thoroughly analyze the financial statements and make recommendations regarding credit risk.

iii) Ascertain the borrower’s ability to repay the amount and present your finding and recommendations to the authorities.

iv) Stay aware of any changes in the lending protocol of the bank or the company.

v) Periodically reconcile credit files to identify any discrepancies & variances

vi) Prepare spreadsheets and develop models to analyze new and existing credit applications

vii) Discuss with customers to understand their real world circumstances, other than financial, to see if they can have any impact on your decision.

4. What skills should a candidate possess to be successful in this profession?

Following are some of the important skills that a person in this role needs to possess:

i) Excellent Quantitative Analysis Skills

ii) Knowledge of various industries

iii)Attention to details

iv) Ability to multitask and prioritize

v) Problem solving aptitude

vi) Ability to handle stress

vii) Excellent written and oral communication skills

viii) Ability to work comfortably with financial software

ix) Team work and people skills to work with traders, bank management, risk specialists, IT people etc.

5. What are some important Credit Analysis Ratios that help you decide the credit worthiness of a company?

Some ratios that help us decide the creditworthiness of a company are:

Creditworthiness Ratio