Credit Officer



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Credit Officer


Description

Many individuals come to a point in their lives when in order to purchase an expensive item, such as a house or university tuition fees, they need to apply for some form of credit or a loan. The same applies to businesses that are starting up or need extra funding; they need credit in order to move forward as a company. This is where a credit officer is needed.

Credit officers understand and analyze financial information about loan applications and business conditions, and approve or reject credit applications. They develop credit structuring alternatives for large account transactions and assist account officers in the management of these accounts. Credit officers must ensure that those who want to borrow money are a safe financial risk to the organization. If a potential borrower is deemed unable to pay back a loan in due time by the credit officer, they will be rejected.

So how does a credit officer determine the creditworthiness of an individual or a business applying for credit or a loan? They must spend their days obtaining information from banks, credit institutions and employers, going over a client's credit history, seeing if they have paid back loans in the past. Credit officers will interview applicants for personal, student and business loans, and for mortgages, going over all of these financial questions. After gathering and synthesizing all applicable financial information, they make a final decision regarding the loan.

In larger organizations, there are often different departments that deal with credit operations. For example, some officers may deal with personal accounts while other work in the commercial sector. Also, some may promote credit cards, some may collect outstanding debts while others might work with higher level accounts. In smaller firms, the credit officer usually does all of the credit-related work. The traditional credit officer position was centered around processing and approving loans. However, the job has changed in recent years to focus more on the sale of financial products and services, such as investment funds.
 
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  Average Earnings  
Lowest 10% of Earners:
$25,790
 
Median Salary:
$43,980
 
Highest 10% of Earners:
$88,450

  Interests and Skills  
Successful credit officers should work with high levels of integrity, honesty and accuracy because they are dealing with numbers and other people's money. They must be skilled problem solvers and be able to make independent, important decisions since they are the ones deciding whether or not to grant loans. Credit officers are good negotiators and communicators as a great deal of the work is dealing with clients. They must also be sympathetic and compassionate because the people coming to them are asking for their help in obtaining credit and they sometimes get rejected. Finally they are born managers who enjoy coordinating the work of others.
 

  Typical Tasks  
  • Plan, organize, direct and control the activities of a credit department in an industrial or commercial organization
  • Administer corporate, commercial and personal loan accounts
  • Evaluate and review loan and credit applications
  • Check out credit ratings with credit bureaus and reporting agencies, and payment experiences with other suppliers
  • Approve or reject credit applications, establish credit limits and determine repayment plans or schedules
  • Ensure collection of overdue or delinquent accounts
  • Ensure credit policies and procedures are followed according to established guidelines
  • Prepare credit and loan reports
  • Recruit credit personnel and oversee their training
  • May supervise a staff of credit personnel
  • May interview, hire and train employees
  • Help senior managers set credit policies, credit lines, procedures and standards.
  • Credit officers typically work in an office environment. Depending on their level of responsibility and management position, they may work longer hours, such as a 50- or 60-hour work week. Credit officers deal with people constantly, including their own staff, members of the public and people in business and industry. Commercial credit managers may travel to firms to interview prospective borrowers and assess business operations.

  Workplaces, Employers and Industries  
  • Credit officers usually work for credit unions, trust companies, banks, finance companies, credit bureaus, commercial lending institutions, industrial corporations and wholesalers, large retail stores and retail chains and government treasury departments.

  Long Term Career Potential  
Experienced credit officers may advance to senior management positions within their organization. They may also shuffle around the financial world working in marketing departments, or becoming financial planners or investment advisors, depending on their qualifications. There is also the possibility of opening up and running one's own credit and loans firm, however most entrepreneurs will only branch out on their own with a solid client base and years of experience.
 

  Educational Paths  
Credit officers usually have a university degree or college diploma in business administration, commerce, economics or a related field. The next step is the completion of either a specific company management training program or a course in credit management. As with all careers, the more on-the-job experience one gets the better chances of getting a good position.
 

Sources:
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2014-15 Edition, http://www.bls.gov/ooh/
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Employment Statistics, 2002, http://www.bls.gov/oes/2002/oes_nat.htm

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