Getting Accredited For A Career In Credit Analysis

Credit analysts evaluate the creditworthiness of individual or institutional loan applicants using quantitative analysis of their financial data. Credit analysts are in high demand by a broad variety of businesses, including commercial banks and credit rating organizations, as well as retail retailers and investment banks.

Professional certification gives an extra degree of competence to credit analysis specialists, which may boost their career chances and remuneration. The five professional qualifications listed below are beneficial for anyone interested in a career in credit analysis.

Credit Risk Certification (CRC)

Credit risk management experts operate in the financial services business, assessing and managing retail, commercial, and corporate credit risk in order to enhance their customers’ financial stability.

Key Takeaways

• Professional certification may help you advance your career.
• Some of these certificates need substantial schooling and field experience.
• Some qualifications must be renewed every few years.

Since 2002, the Risk Management Association has awarded credit risk certification as a professional accreditation. 1

CRC should be considered by financial services professionals with at least five years of relevant work experience who work in the areas of credit risk, market risk, and operational risk.

Professionals seeking the CRC credential must join the Risk Management Association and complete 45 units of continuing education activities every three years, such as completing relevant courses and attending professional meetings. 2

Applicants must pass the CRC test in order to be certified. The test covers seven key areas of credit risk assessment, including properly analyzing a company’s financial state, cash flow strength and quality, collateral value, and loan repayment sources. 3

Applicants should have a solid understanding of financial statement and tax-return analysis, financial accounting, and commercial credit.

To prepare for the five-hour, 120 multiple-choice question CRC test, the RMA advises 40 to 80 hours of study and a practice exam. The exam is given online during two testing periods, one in the spring and one in the autumn, with each window lasting around two months. 4 5

Consult with top experts in your sector to determine which qualifications are most valuable.

Certification Requirements and Costs

The exam fee is $495. The practice exam costs $25.

Recertification costs $100 every three years, and candidates may choose to buy test preparation resources.

RMA membership costs $295 a year.

As a result, CRC certification has an initial cost of roughly $550 and continuous fees of several hundred dollars each year for extra study materials. 4

Professional Certificate in Credit

Pearson’s financial training firm, the New York Institute of Finance, provides a professional diploma in credit. Individuals must take four core courses from a list of 12 and two optional courses from a list of seven.

Credit risk analysis, financial statement analysis, cash flow, and credit derivatives are among the subjects covered in the courses. The program provides day classes, evening classes, and online classes. Course rates range from around $100 to hundreds of dollars.

All courses must be completed successfully within three years to get this credential. To succeed, instructor-led courses need 80% attendance, whereas online courses require a grade of at least 70%.

Credit Business Associate (CBA)

The National Association of Credit Management awards the professional certification Credit Business Associate (NACM).

CBA practitioners work in credit management, and CBA certification demonstrates expert knowledge in fundamental financial accounting, company credit concepts, and beginning financial statement analysis.

The CBA credential has no job experience requirement, making it an accessible alternative for those just starting out in credit management. This credential, on the other hand, requires an educational background, which may be obtained via college coursework, self-study, or NACM courses.

Only three courses need the equivalent of a semester’s worth of study: Basic Financial Accounting, Financial Statement Analysis I, and Business Credit Principles. To demonstrate successful course completion with a grade of C or above, end-of-course certificates, official transcripts, or grade reports are needed. 6

In addition to satisfying the academic requirement, passing the CBA test is required for certification. This three-hour test has 125-150 multiple-choice and true/false questions. Applicants may also be required to submit a balance sheet, an income statement, a statement of cash flows, or a common size analysis for the test.

The examination is given three times a year, in May, July, and November.

To prepare, the NACM suggests four texts on corporate credit fundamentals, accounting, financial statements, and credit management. It also includes an overview of the particular material to be studied. On the NACM website, a free one-hour practice test is offered. 7

Certification Requirements and Costs

Individuals must submit a CBA application, which mostly requests information about the applicant’s educational history. NACM members pay $235, while nonmembers pay $470. The test is included in the application price.

Applicants must also submit a professional résumé, transcripts, and the NACM Career Roadmap form (described in the following section).There is no obligation for ongoing education.

Tuition and expenses for completing the requisite courses, as well as the cost of purchasing course texts and test preparation materials, are additional expenditures connected with becoming a CBA. A cost of $175 for members and $350 for nonmembers is also charged to create your personal file with the NACM-National Education Department. 6

Credit Business Fellow (CBF)

The NACM awards the CBF professional accreditation to credit management professionals. It expands on the CBA distinction, which is necessary to acquire the CBF designation, by requiring additional coursework and work experience.

CBF certification denotes professional expertise and specialist understanding in the areas of business law, credit law, financial statement interpretation, and credit risk assessment.

CBF certification is available to credit management professionals who have acquired at least 75 Career Roadmap points. 8

Certification Requirements and Costs

To get certified, applicants must first pass the CBF test, which must be approved by the NACM’s National Education Board.

Business law, credit law, financial statement interpretation, and credit risk assessment are all included in the three-hour test. It is given three times a year, in May, July, and November.

To prepare for the test, the NACM recommends three texts covering the topic content. A one-hour free practice test is accessible online at the NACM website.

Individuals must also submit the CBF application, which is relatively simple since they already completed the more extensive CBA application, as part of the certification procedure.

NACM members pay $285 for application and exam fees, while nonmembers pay $570. Retakes cost $99.

Other expenses of becoming a CBF include all fees involved with initially becoming a CBA, tuition and fees to finish the requisite CBF curriculum, and the cost of purchasing CBF course texts and test preparation materials. 9

Certified Credit Executive (CCE)

The NACM’s CCE is an executive-level professional qualification.

It may be obtained in one of four methods, each of which requires a unique mix of education and job experience.

• A four-year college degree, ten years of professional credit management experience, and 125 Career Roadmap points are required for Plan A. (For job experience that awards points, see the CBF section above.)
• Plan B requires the CBA and CBF certifications, as well as 125 Career Roadmap points and the submission of a résumé.
• 15 years of professional experience and 125 Career Roadmap points are required for Plan C. It is only open to candidates who are 57 or older.
• Individuals who have finished the second year of the Graduate School of Credit and Financial Management degree have a fourth option for taking the test.

Professional expertise and expert understanding in accounting, finance, local and international credit concepts, management, and legislation are shown by CCE certification.

Applicants must pass a four-hour CCE test, which “evaluates a candidate’s ability to apply principles to circumstances or explain how they pertain to the subject of business credit,” according to the NACM.

Each CCE exam varies in length and breadth, but it usually consists of two sections: one with short answer and essay questions and the other with a case study. Each component is worth 50 points, and passing the test requires a score of at least 70%.

The NACM recommends five texts that cover the topics. The examination is given three times a year, in May, July, and November. There is no practice examination. 10 11

Certification Requirements and Costs

Individuals must submit a CCE application and pay an application and test cost of $385 for NACM members and $770 for nonmembers as part of the certification procedure.

Recertification is required every three years until the age of 60, or until the age of 55 and formal retirement. Recertification costs $175 and needs six recertification points earned via educational courses or participation in recognized NACM and professional events. 11

Tuition and expenses for completing the requisite curriculum, as well as the price of textbooks and test preparation materials, are additional expenditures involved with obtaining and maintaining the CCE certification.

If you do not already have a personal file with the NACM-National Education Department, there is a one-time cost of $175 for members and $350 for nonmembers. 9

Which One?

When determining which designation to seek, or whether to pursue a designation at all, it’s critical to consider if the time and money involved will result in a more robust career.

You should assess if the information will assist you and whether the designation is generally recognized and regarded in your profession, as with any continuing education.

Talking to senior experts in your sector will help you choose which qualifications will be most beneficial to you.

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