Credit Analyst Interview Questions
Credit Analysts determine the amount of risk of a loan or, in other words, the creditworthiness of a customer. This is easier said than done; a credit analyst must be very knowledgeable in data analysis and risk assessment methods as well as various financial, legal and sometime programming aspects.
They usually work for various types of banks, rating agencies or other financial firms. Experienced candidates likely hold professional credentials. Find out how they keep abreast of developments in the economic world and how their past experience matches your industry and needs. If you’re hiring for an entry level position, focus on their basic theoretical knowledge and soft skills. Ask what they know of your company/services and why they’re interested in this field.
The best candidates will have an analytical mind and excellent mathematical ability. Being methodical and detail oriented is of utmost importance. Additional qualities like communication and critical thinking should also be addressed during the interview. The following list will give you ideas on how to effectively evaluate candidates.
Operational and Situational questions
- How does a balance sheet or cash flow statement help you in determining credit risk?
- Walk me through the process of determining whether we should loan $5 million to a company
- If an important long-time customer applied for a loan, but after your analysis you found the risk was too high, how would you handle it?
- Imagine one of the company’s salespeople strongly wants to acquire a particular customer, but you’ve found their creditworthiness is lacking. How do you resolve this?
- What’s your quantitative analysis experience?
- What financial software have you used in the past?
- Which financial ratios do you use more often? Which is the most important and why?
- What types of customers have you dealt with in the past?
- Can you explain the meaning of Credit Default Swap (CDS)?
- What’s different with Basel III?
- Do you like working in a team?
- Tell me about a time your judgement on a case was proven incorrect. What should you have done differently?
- Recall a time you used your communication skills to resolve an issue at work
- Tell me about a time you developed an effective method or model to assess profitability