Difference Between Credit Analyst & Underwriter

Credit analysts and underwriters are similar positions in some ways, but they have key differences, primarily in the level at which they make financial decisions. Learn details about these two careers, the responsibilities undertaken, and the daily job tasks.

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Comparing Credit Analysts to Underwriters

If you're interested in a career that involves financial analysis, along with helping individuals and businesses meet their financial goals, then a career as a credit analyst or underwriter might be for you. A credit analyst evaluates credit history to determine the risks of granting a particular individual a loan. An underwriter analyzes documents from clients, including credit information and tax history, to determine the loan options that can be provided by a financial institution considering granting a loan.

Job Title Education Requirements Median Salary Job Growth (2016-2016)*
Credit Analyst Bachelor's degree in math, business, economics, or accounting $69,930 (2016)* 11% (for all financial analysts)
Underwriter Bachelor's degree in business, finance, or accounting $56,860 (2017)** 11% (for all loan officers)

Sources: *U.S. Bureau of Labor Statistics, **PayScale.com

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Responsibilities of Credit Analysts vs. Underwriters

Credit analysts and underwriters are both responsible for analyzing financial data to determine if a loan or other credit should be granted. Credit analysts are usually responsible for analyzing the creditworthiness of a person or business. They compile clients' payment history, income, and personal savings and then use this information to determine how risky it would be to grant a loan or increase credit. Underwriters review clients' loan applications and look at their financial info to determine what kind of loan they can offer an individual. Underwriters often turn over their findings to credit analysts in order to verify approval of a loan. Both of these positions must follow all government regulations pertaining to banking and loaning money.

Credit Analyst

A credit analyst is a low- to mid-level position within a credit, bank, or other financial institution that lends money to individuals and businesses. They are responsible for analyzing the credit history and current credit situation of individuals and businesses. They make recommendations and conduct other tasks related to credit reporting, including compiling loan presentations for businesses. Credit analysts work in an office environment, working a standard 40-hour per week schedule, although overtime may occasionally be required if workload necessitates. There are a few advancement opportunities for credit analysts, including senior credit analyst or credit manager.

Job responsibilities of a credit analyst include:

  • Analyzing the full credit history and current credit status of a loan applicant
  • Analyzing credit data to assess risk factors of a particular loan for the financial institution
  • Ensuring current credit accounts remain in good standing
  • Establishing terms for credit requests that have been granted
  • Working with clients to improve their credit situation

Underwriter

An underwriter is responsible for determining commercial and personal loan eligibility, based on various risk factors to the lending institution. Underwriters work with loan officers and clients throughout the loan application process, with their primary duty being to analyze loan documentation. They may also determine the amount that their institution is willing to loan to a person or business, along with the terms of the loan. Underwriters work in a standard office environment, usually within a financial institution. They work a standard 40-hour per week schedule, sometimes working overtime if their workload requires it. Advancement opportunities include working as a senior underwriter or underwriter manager.

Job responsibilities of an underwriter include:

  • Following all governmental regulations regarding banking, finance, and loans
  • Analyzing all loan documents in a very detail-oriented manner
  • Verifying the validity of all loan documents and requesting additional information as necessary
  • Determining client loan eligibility and loan terms
  • Analyzing the risk factors associated with various loans

Related Careers

If you are interested in becoming a credit analyst, a career as a business analyst may be of interest to you. Both careers involve working with financial information to determine the best financial direction for an organization. A career as a medical underwriter may be of interest to someone pursuing a career as an underwriter, as both careers require skills related to risk analysis and coverage requirements.

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