How do I Become a Credit Risk Manager?

Carol Francois

There are four items required to become a credit manager: post-secondary education, financial industry experience, advanced computer skills and communication skills. A credit risk manager is responsible for reviewing the financial statement details and prior history, then making a decision about the level of acceptable risk for the business or organization. Depending on the size of the organization and the industry, there might be multiple credit risk managers.

Credit risk managers often perform credit history research before making lending decisions.
Credit risk managers often perform credit history research before making lending decisions.

Customers can apply for credit with a company with which they do a significant amount of business. For example, a local bakery can extend credit to area restaurants. Materials are ordered and delivered, and payment is received later, after the submission of an invoice. The decision about how much credit to extend to a customer is made by a credit risk manager. In the financial services industry, this process applies to individuals as well as businesses.

The first step necessary to become a credit risk manager is to compete a post-secondary training program in accounting, business or commerce. These programs are available from almost all colleges and universities. Admission requirements include high school graduation and courses in language arts, accounting and business.

Related experience in the financial services industry or a similar sector is required for anyone who wants to become a credit risk manager. This is not an entry-level position, and most managers have between five and eight years of experience in credit. The positions held should primarily be focused on credit evaluation, risk assessments, calculating financial rate of return and similar activities.

Anyone who wants to become a credit risk manager must have advanced computer skills. Information technology has completely changed how this industry works, and it is now virtually impossible to function as a credit risk manager without using computers. These skills can be learned through short courses or employer-provided training.

Excellent written and oral communication skills are essential in this role. Although most information can be collected on a form, interacting with the client is the best way to learn about his or her attitude toward risk. In addition, these discussions can provide useful information about shifts in the industry and the impact of economic change on the client. Both of these items have a huge impact on overall credit risk.

Career advancement opportunities available to anyone who has become a credit risk manager include a position as a senior manager, as a director of a department or in another related role. In many organizations, additional formal education is required to make this transition. Talk with the human resources department to learn more about what is required to move into a more senior position.

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