A Detailed Guide on Credit Analyst Interview Questions

1x1.trans A Detailed Guide on Credit Analyst Interview Questions

Credit Analyst Jobs Interview

 

Facing an interview is something that you cannot avoid for getting any job in the corporate world.

Whether it is a telephonic interview, a video call interview or face to face interview, any company would want to make sure that you are the right fit for them.

The purpose of interviewing is manifold including gauging your technical (subject matter) knowledge, stress management skills or getting to know your personal attributes.

In this article, I am going to tell you about credit analyst interview questions in a credit analyst jobs interview and the reason why these questions are asked, but before that let me throw some light on the profile of a credit analyst.

Investopedia defines a Credit Analyst as:

A financial professional who has expertise in evaluating the creditworthiness of individuals and businesses. Credit analysts determine the likelihood that a borrower will be able to meet financial obligations and pay back a loan, often by reviewing the borrower’s financial history and determining whether market conditions will be conducive to repayment.

The job of a credit analyst revolves a lot around financial statements and deriving meaningful conclusions by analyzing the numbers in these financial statements. The analyst has to be well versed with concepts of finance–especially financial ratios.

Entry Level Credit Analyst Jobs Interview Questions

1. General questions

These questions are mostly related to your finance concepts that you have studied in your college. In addition to the basic questions of “What’s” and “How’s” of the finance subjects you should also expect the questions of general awareness especially of the finance world. This is basically to understand your level of interest in the field that you are going to work in. The interviewer might also ask your opinion on a few major happening in the capital markets and government’s monetary policies.

More often than not, these questions do not decide your selection or rejection, but if answered smartly you might add a few brownie points during the interview.

2. Personal questions

These questions are asked to know you better as an individual and whether or not you are fit for the company. Please work on your strengths and weaknesses questions because 99 out of 100 interviews will ask you this question at the entry level (Trust me – THIS IS TRUE).

Try to be honest in whatever you write in your resume, because more often than not you will be asked these questions on what you write in there.

Another suggestion is that always be ready with experiences to share in case the interviewer asks you. For example – if you have written in your resume that you are a team player, share a story wherein you acted as a good team player which helped your team.

3. Surprise questions

“What should be the cost of the chair that you are sitting on?” Don’t be surprised if the interviewer asks you this question! Interviewers are most likely to throw random and completely irrelevant questions to you. But trust me these questions are very relevant for the interviewer. The example I shared above is a real question that was asked to one of the candidates in a Bank of New York interview.

Such questions are aimed at determining how you behave in unfamiliar and unexpected situations.

You might also be tested on how you handle stress by asking you a range of these questions one after the other. Make sure that you handle these questions with composure and try not to lose your focus.

4. Career Questions

Since this interview is expected to be at the beginning of your career in finance, the interviewer would like to know your career plan as on date and whether or not you are fit as per company’s growth plans. The interviewer would be interested to know for how long you plan to stick with the company.

I suggest prepare milestones for at least next 5 to 10 years and share them with the interviewer.

Senior Credit Analyst Interview Questions

1. Past experience questions

Typically if you have applied for a senior credit analyst’s position, you are most likely to have prior experience in the same field. The interviewer will surely ask you about your last profile, a few projects that you worked on, your learning from the last job, reasons for leaving the last job and reasons for your application in this company. Preparing for these questions is not a demanding task but still I suggest you to practice their answers before the interview.

2. Practical questions

These questions will be related to your work in the last profile and the position that you have applied for. The aim of these questions is to identify how you would apply your learning in work related situation. You could be given case studies to solve during the interview or you could also be asked to plan out a series of tasks involved in a project or a problem statement. These questions have a very strong influence on your selection or rejection, therefore try not to answer in hurry and think before you answer.

3. Hypothetical questions

These questions are usually aimed at understanding your soft skills. For example – “What would you do if your boss asks you to do his personal work during office hours?” This is a question with multiple objectives behind it. And there is not just 1 correct answer. The interviewer wants to understand your personal traits and would want to know how you react in one such situation. Here again, think before you answer. As these questions are hypothetical in nature, don’t forget to mention the assumptions you are making before answering.

If you are expected to have subordinates in your new position then you might face a few people management questions as well.

4. Negotiations

There would not be a lot of questions in this part of the interview but surely there will be a discussion on these lines. Please be reasonable in negotiating your salary and try to justify the expected salary. I suggest researching the average salaries at this level in the industry, and if possible in the company as well.

Credit Risk Analyst Interview Questions

The profile of a credit risk analyst is vital and companies are usually extremely cautious while recruiting a resource for this profile.

You need to be very well prepared for the interview in order to get a call back from the employer.

Apart from the questions mentioned above in the article, following are the areas wherein most of the questions will be asked for this profile.

1. Finance related questions

Credit risk analysts deal with financial records day in and day out.

For an employer, it is of utmost importance that the candidate is well versed with the financial statements like balance sheet, profit and loss accounts, funds flow statements and cash flow statements.

Expect a lot of questions based on these financial statements.

Another important area you need to work on while preparing for the interview is financial ratios. Since the decision you make as a credit risk analyst will revolve around lending money, you have to be well abreast with liquidity ratios, profitability ratios etc.

In addition to finance related questions, you will also be asked questions on tools and techniques used in financial modeling and forecasting. Make sure that you have practiced for enough number of hours in understanding these tools and techniques like SPSS and Microsoft Excel.

2. Industry specific questions

There are broadly two types of credit risk analyst profiles – retail lending and corporate lending.

Even though the nature of work is similar, these two profiles are a bit different.

In retail lending, you will have to deal with data around individuals, usually HNIs. For this profile, you need to have sound knowledge of the BFSI industry and also money markets.

Whereas in corporate lending, the data and information that you will handle is for a company or even a group of companies. There can be a few industry specific questions as the recruitment typically is done for a specific industry vertical. Please make sure that you are aware of the industry vertical throughout the value chain. Keep in mind all the stake holders in the industry and prepare for the interview.

3. Macro-economic questions

These questions do not decide your selection or rejection in the interview but still are an important part.

If you are able to convincingly answer these questions, it creates a positive image in the interviewer’s mind and the chances of you getting selected become brighter.

Questions around fiscal policies, monetary policies and budgets are the most common ones to be asked. These questions are asked to know your opinion and seldom have just one correct answer. There would be questions wherein you would be asked to derive the implications of these macro level policies and indicators on a particular industry or a specific company. Try not to be too staunch in your answers and always think before you answer.

I hope this article gave you clarity on what kinds of questions are asked in a credit analyst job interview at different levels. If you have any questions or suggestion please feel free to write back.

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1x1.trans A Detailed Guide on Credit Analyst Interview Questions

12 Responses to “A Detailed Guide on Credit Analyst Interview Questions”

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  1. anurag says:

    Nice work!

    My 20 cents: While doing credit analysis, most imp are profitability (primarily net income margin) and leverage (you can choose one or more ratios depending upon tenure of the loan you are going to provide e.g. if u r offering a short term loan you ll mostly focus on current debt). Liquidity is imp but it comes after leverage and profitability as its going to improve anyways after you extend your finance to the borrower..

    Business model of the company, number of locations, age of business, customer’s relationship with your bank in past, industry’s average annual revenue growth, 1 year revenue forecast are some of the imp points to pitch upon..

    Customer’s CIBIL score to find out past delinquencies/derogs (if any)… check for his criminal records, any judgments against him … also look for existing liens etc…

    If possible, try to figure out how many loan inquiries has he thrown in recent months,

    In credit analysis, we cn basically look at anything and everything which indicates whether the person will pay back or not..

    While doing this work, you are frontline defence for your bank.

    Hope it helps!

  2. Manoj says:

    Dear sir ,

    Hello sir i have done MBA Finance in university pune so how find it job which role accept me

  3. mehedi says:

    Please notify me

  4. Hello.Avadhut
    Excellent article!
    Credit analyst play a very important role within an organization by reviewing and analyzing data to make credit and lending decision on behalf of the company. . A high level of care is taken to select the most qualified candidates for these positions because the decisions they make ultimately affect a company’s bottom line by forecasting and predicting the amount of risk that’s associated with a particular transaction.

    I found you blog interesting. You have covered all interview questions in simple manner. It is helpful for all those people who are looking for credit analyst job.
    Thank you so much!

  5. omprakash b says:

    Namaste and Greetings,

    Dear Sir,

    This is omprakash, i done M.Com & MBA in Finance, worked in Banking & NBFC at Hyderabad. Here I am working as Sr.Credit Process Associate, I am handling all loan Process & disbursement (Pre Sanction & Post sanction) activities for last 4.5 years off role employment. I want to make my career as a Credit Operations Manager in NBFC or Baning Sector , so which Companies you would suggest me who deals in this area.

    Thanking You

  6. Vinay says:

    Hello Sir,

    Hi…,

    This is Vinay, i have done MBA in Finance & currently working in NBFC, Ghaziabad. Here I am working as credit admin & I am handling all loan disbursement activities for last 3.5years. & I want to make my career as a Credit Analyst in KPO, so which KPO you would suggest me who deals in this area.

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