Credit underwriters have the competence to determine if a client is creditworthy or not.
Credit Underwriter Job Description, Key Duties and Responsibilities
If you need information about what credit underwriters do, including the duties, tasks, and responsibilities that characterize their job description, then this post will be useful to you. Please, continue reading:
What Does a Credit Underwriter Do?
Credit underwriters are responsible for conducting detailed research on the financial history of businesses and individuals to determine their creditworthiness.
Their job description entails evaluating financial information and risks prior to granting loans to businesses or individuals.
They work for banking institutions, government agencies, and commercial lenders.
They assist in determining whether loans should be extended to loan applicants by evaluating the information provided by potential borrowers, such as their financial liabilities, credit history, employment, and income, to determine the risks of extending credit to them.
The credit underwriter role also include reviewing and verifying income statements, tax returns and other financial documents presented by clients and prospects to develop a borrower’s profile and arrive at a credit recommendation.
It also involves working closely with loan officers and assisting them in verifying the accuracy of loan applications.
Credit underwriters also help the organization to determine new loans to be issued or lines of credit to be approved based on their assessment of the credit worthiness of applicants.
They may also apply the result of financial assessment on applicants to propose revisions to credit limits or interest rates on the loans of qualified borrowers.
Credit underwriters are responsible for spreading and analyzing financial statements supplied by customers and potential customers; sources of financial statements include corporate tax returns, company prepared financials, accountant prepared financials, personal financial statements, and/or personal tax returns.
Their work description also entails preparing loan applications, credit modifications, and loan extensions for commercial customers.
It also involves preparing loan applications by obtaining and analyzing all necessary financial data using specialized commercial credit analysis software.
Their duties also entails conducting compliance review with the bank’s lending policy, previously approved terms, conditions and documentation standards, loan covenants, undertaking an assessment of their risk profile, and estimating the relative profitability of the relationship to the organization.
Credit underwriters also interact with relationship managers in developing credit requests to be presented to loan committee for final approval; communicating their recommendation of terms and conditions; identifying items that warrant additional information or analysis with the potential customer; and determining if the request is an acceptable credit risk.
They also undertake research to be abreast with economic trends, industry analysis, regulatory requirements, and business and trade publications which could impact credit risk and/or the probable success of current customers and applicants.
They also represent the credit department at loan committee meetings responding to questions regarding the analysis of individual credits; modify credit packages to represent the committee’s final approval, as well as communicates senior management’s comments and requests of the commercial underwriting department to other staff members.
To become a credit underwriter requires a minimum of a Bachelor’s degree in Business, Finance, or Accounting. Recruiters sometimes have preference for applicants who have also undergone formal credit training.
To perform their job successfully, they must also possess strong communication and interpersonal skills and research abilities, as well as computer skills to utilize specialized commercial credit analysis software tools.
The credit underwriter performs various functions, including carrying out assessment on information provided by clients and prospects to determine the capacity of borrowers to repay their financial obligations and mitigate credit risk.
The major tasks, duties, and responsibilities that make up the credit underwriter job description are listed below:
Responsible for underwriting commercial loans and preparing presentations
Takes decision on credit applications under the supervision of senior underwriters
Utilizes provided software to score credit applications
Establishes rapport; maintains and grows important relationship within the portfolio
Performs annual reviews
Works with the credit administrator on policies and procedures
Provides support for business developers on new customers
Undertakes the analysis, evaluation, and underwriting of proposed credit facilities for customers and prospects
Assesses credit opportunities; identifies key risks, and structures alternatives working with relationship managers and credit officers
Responsible for preparing in-depth credit packages
Responsible for conducting research on borrowers and industries
Takes ownership of the credit process, making decisions in the best interest of the customer and organization
Provides support to account officers on customer calls as needed
Responsible for measuring covenants put in place within loan agreements, with a clear understanding of the effect and purpose of those loan covenants, and communicates the compliance of the borrowers to the relationship manager and chief credit officer as needed
Completes annual reviews, modifications, extensions, renewals, and new loan requests for customers with minimal required changes from the credit approvers
Analyzes more complex credits with assistance from senior department staff
Applies experience with comparable credits to recommend appropriate covenants, terms, and conditions, and structure for a credit request
Identifies policy exceptions within a credit request
Discusses risk ratings and the rationale for the determination of acceptable credits with the relationship managers (RM) and credit approvers.
Credit Underwriter Requirements – Skills, Knowledge, and Abilities for a Successful Career
If you are seeking the job of a credit underwriter, you will be expected to possess certain qualities, experience, and qualifications, for the recruiter to be convinced that you will be able to effectively perform the obligations, purpose, and objectives of the credit underwriter role.
Shown below are major credit underwriter requirements that most recruiters typically expect prospective applicants for the position to meet to qualify for an interview:
Education: Credit underwriters require a minimum of Bachelor’s degree in Business, Finance, or Accounting
Knowledge: They may require a minimum of 3 years of underwriting and analysis experience depending on the needs of the employer. They may also be required to have completed a formal credit training program, and it is also important that they possess the ability to comprehend complex commercial credits
Communications skills: They require both oral and written communication skills to work with the lending and credit teams, relationship managers, credit approvers, etc.
Interpersonal skills: They require the ability to develop and maintain internal and external relationships within their portfolio
Research skills: They require the ability to conduct research into borrowers and industries to be abreast with factors that may affect profitability and the borrower’s ability to repay loans.
Conclusion
If you are a recruiter or HR manager needing to hire for the position of credit underwriter, the sample job description presented in this article will help you to quickly and easily make a good description of the role for your company.
Posting a good description of the vacant credit underwriter position in your company will help prospective candidates learn about the expected duties and responsibilities they will perform, and therefore be able to decide if they have the competence and experience to effectively carry them out if hired.
This will enable you to get the best suited and qualified candidates for the position.
This post is equally beneficial to individuals looking to start a career in the credit underwriting field to increase their knowledge of the duties and responsibilities of credit underwriters.
Did this article help you learn about what credit underwriters do? Please, make a comment in the box below. Do also share your job description if you work as a credit underwriter.
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