Interview questions to ask when hiring credit analysts

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 therefore 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 when answering questions.

These are some of the questions you should ask in an interview when hiring a credit analyst.

What are the processes you follow when considering a customer’s suitability for credit?

Asking about the processes they follow when will provide 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 own analysis setup.

Can you explain what technical expertise you possess in regards to credit analysis?

During the interview, it is important to give candidates a chance to detail 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.

Do you believe that credit analysts need to possess 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?

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.

Rounding off

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.

Analytical thinking is a vital skill all credit analysts must possess, but it’s also important in the interview to ask candidates questions about their problem-solving abilities, how they work as part of a team and their knowledge of financial markets.