Fundamentals of Credit from Coursera

Credit plays an important role in the lives of many individuals; it’s also a key source of funding for businesses making capital expenditures (CAPEX). In this course, we discuss important lending topics like the difference between traditional loans and trade credit, different types of interest, different types of loans, where collateral security fits in, and how to build an amortization schedule for reducing term debt. We cover an overview of the 5 Cs of Credit framework and how it may influence different loan characteristics before diving into some qualitative assessment tools and a list of the key financial ratios that an analyst would look at when evaluating a company’s creditworthiness. We also take a step back to look at the credit landscape to help learners understand what kinds of career opportunities exist for aspiring credit professionals.

Upon completing this course, you will be able to:

• Define what credit is and how it’s created.

• Identify some of the different career opportunities available to credit professionals.

• Compare different types of interest payments and loan characteristics to help inform an appropriate credit structure.

• Explain what capital expenditure (or CAPEX) is and how debt financing can support it.

• Explain the 5 Cs of Credit framework and how it informs risk assessments.

• Identify the important qualitative and quantitative techniques, including key financial ratios used in the risk assessment process.

This Fundamentals of Credit course is perfect for any aspiring or early-stage credit professionals, including business and commercial bankers, credit analysts, real estate lenders, equipment finance, loan & mortgage brokers, and other private (non-bank) lenders.

What's inside

Syllabus

Getting Started

In this course, we will learn what credit is, compare important loan characteristics, and cover the qualitative and quantitative techniques used in the analysis and underwriting process.

Introduction to Credit

Types and Features of Credit

Midway Check-In

The Credit Process & Analysis Fundamentals

Course Conclusion

Qualified Assessment

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Explores the 5 Cs of Credit framework, which is a cornerstone for evaluating credit risk and making informed lending decisions in the finance industry

Covers qualitative and quantitative techniques, providing a practical toolkit for assessing creditworthiness and managing risk in various lending scenarios

Examines different types of interest payments and loan characteristics, which helps learners understand the nuances of credit structuring

Introduces the concept of capital expenditure (CAPEX) and its relationship to debt financing, which is crucial for understanding corporate investment strategies

Provides an overview of career opportunities for credit professionals, which helps learners understand the potential career paths in the credit industry

Teaches how to build an amortization schedule for reducing term debt, which is a fundamental skill for managing loan repayments and financial planning

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Fundamentals of Credit with these activities:

Review Basic Accounting Principles

Show steps

Reinforce your understanding of fundamental accounting principles, as these are essential for interpreting financial ratios and assessing creditworthiness.

Browse courses on Financial Statements

Show steps

Review the accounting equation (Assets = Liabilities + Equity).
Study the definitions of key financial statement items.
Practice preparing basic financial statements.

Review 'Financial Intelligence for Entrepreneurs'

Show steps

Gain a practical understanding of financial statements and key financial concepts to better assess creditworthiness.

View Putting Knowledge to Work on Amazon

Show steps

Read the book and take notes on key concepts.
Relate the concepts to the 5 Cs of Credit framework.
Identify how the concepts can be applied in credit analysis.

Calculate Financial Ratios

Show steps

Practice calculating key financial ratios to improve your ability to quickly assess a company's financial health.

Browse courses on Financial Ratios

Show steps

Gather financial statements for a sample company.
Calculate liquidity, profitability, and solvency ratios.
Interpret the ratios and draw conclusions about the company's creditworthiness.

Four other activities

Expand to see all activities and additional details

Show all seven activities

Build an Amortization Schedule

Show steps

Create an amortization schedule for a sample loan to solidify your understanding of how debt is repaid over time.

Show steps

Define the loan amount, interest rate, and loan term.
Calculate the periodic payment amount.
Create a table showing the principal and interest portions of each payment.

Review 'Credit Risk Management'

Show steps

Deepen your understanding of credit risk management techniques used by financial institutions.

View Putting Knowledge to Work on Amazon

Show steps

Read the book and take notes on key concepts.
Relate the concepts to the course materials.
Identify how the concepts can be applied in your career.

Analyze a Company's Creditworthiness

Show steps

Apply the 5 Cs of Credit framework and financial ratio analysis to assess the creditworthiness of a real company.

Show steps

Select a publicly traded company.
Gather the company's financial statements and other relevant information.
Analyze the company's character, capacity, capital, collateral, and conditions.
Calculate key financial ratios and interpret the results.
Write a report summarizing your findings and recommendations.

Attend a Finance Networking Event

Show steps

Connect with other finance professionals and learn about career opportunities in credit.

Show steps

Search for finance networking events in your area.
Prepare a brief introduction about yourself and your interests.
Attend the event and network with other attendees.
Follow up with people you met after the event.

Career center

Learners who complete Fundamentals of Credit will develop knowledge and skills that may be useful to these careers:

Credit Analyst

A career as a credit analyst involves evaluating the creditworthiness of individuals or businesses, and this course directly prepares you for this kind of work. This role requires understanding different types of loans, interest, and the use of financial ratios. The course helps you to understand how to assess risk using the 5 Cs of Credit framework and identify important qualitative and quantitative techniques. The course may be useful for anyone pursuing a career as a credit analyst because it provides a strong overview of the lending process, from the creation of credit to its analysis. Understanding amortization and debt financing as discussed in the course will be very helpful when analysing a company’s creditworthiness.

See salaries and explore the career path for Credit Analyst

Commercial Banker

Commercial bankers work with various clients to provide loans and other financial services, and this course provides an excellent foundation for anyone interested in a career in this field. This role requires a solid understanding of credit and the lending process, which this course covers by detailing traditional loans, trade credit, and different loan types. The course may be useful for aspiring commercial bankers as it covers important topics like collateral security, amortization schedules, and the use of financial ratios in assessing creditworthiness. Learning about the 5 Cs of Credit will help you to assess the risk of lending to businesses.

See salaries and explore the career path for Commercial Banker

Loan Officer

As a loan officer, you are in charge of evaluating loan applications and working with clients to determine the best loan structure, and this course provides a strong base for you. A loan officer looks at different types of interest, loans, and the role of collateral, all of which are covered in this course. The course may be useful in understanding capital expenditures, the 5 Cs of credit, and qualitative and quantitative assessments used in this context. With an understanding of the information presented in the course, a loan officer can help clients make informed decisions regarding their financing.

See salaries and explore the career path for Loan Officer

Mortgage Broker

A mortgage broker helps individuals find suitable mortgage loans, and this course provides them an introduction to the credit landscape. This role involves understanding different loan types, interest, and how to structure debt, all of which are discussed in this course. The course may be useful for a mortgage broker by explaining amortization, the 5 Cs of Credit, and financial ratios used in risk assessment. The course helps you understand how to use this information to evaluate different loan options.

See salaries and explore the career path for Mortgage Broker

Equipment Finance Specialist

An equipment finance specialist focuses on lending for equipment purchases, and this course helps you to understand these transactions. The course includes an overview of the many facets of the lending process with a discussion of loans, interest, and collateral security. The course may be useful because it introduces you to key financial ratios and risk assessment techniques, which are crucial when evaluating loan applications for equipment. Understanding capital expenditures and debt financing will be particularly useful for an equipment finance specialist.

See salaries and explore the career path for Equipment Finance Specialist

Real Estate Lender

Real estate lenders specialize in providing loans for real estate transactions, and this course is good preparation for this role. This role requires an awareness of different loan characteristics, loan types, and the principles of credit, all of which this course covers. This course may be useful for real estate lenders since it explains capital expenditures, the 5 Cs of Credit, and the use of qualitative and quantitative assessment tools, including key financial ratios. This knowledge helps real estate lenders to structure loans that are both beneficial to both the lender and the borrower.

See salaries and explore the career path for Real Estate Lender

Underwriter

Underwriters assess the risk associated with lending or insurance, and this course presents the fundamentals of this process. The course introduces the main components of credit and lending including interest, collateral, and repayment schedules. The course may be useful to an underwriter because it introduces credit analysis techniques including the 5 Cs, qualitative assessments, and financial ratio analysis. An underwriter will better assess risk after taking this course.

See salaries and explore the career path for Underwriter

Financial Analyst

Financial analysts assess the financial performance of companies and make recommendations based on their findings, and this course introduces a key area of finance. This course may be useful for aspiring financial analysts by explaining relevant topics such as debt financing and capital expenditures. The course also discusses important qualitative and quantitative risk assessment techniques. The course’s overview of credit can help a financial analyst understand how debt impacts a company's financial health.

See salaries and explore the career path for Financial Analyst

Business Development Manager

Business development managers work to generate leads and grow their company's business, and this course may be useful as an introduction to the credit field. This role benefits from understanding the lending process, and this course provides an overview of loans, interest, and different types of credit. This course may be useful for anyone seeking to understand the credit process by covering topics like amortization, the 5 Cs of Credit, and key financial ratios. A business development manager will be more effective when they understand how financing works.

See salaries and explore the career path for Business Development Manager

Portfolio Manager

Portfolio managers oversee the management of investments and financial assets, and this course may be helpful in understanding the risk of lending. The course introduces the principles of credit including different loan types, interest, and the role of collateral security. As a portfolio manager, the course may be useful by discussing capital expenditure, the 5 Cs of Credit, and qualitative and quantitative tools that help assess risk. By adding the knowledge provided in the course, a portfolio manager makes better investment decisions.

See salaries and explore the career path for Portfolio Manager

Relationship Manager

Relationship managers build and maintain relationships with clients, and this course may be useful in understanding the needs of clients seeking credit. A relationship manager may benefit from the course by understanding the different types of interest, loans and the role of collateral. This course may be helpful by introducing the 5 Cs of Credit, qualitative assessments, and key financial ratios. With a good understanding of these concepts, a relationship manager is better positioned to discuss financing with clients.

See salaries and explore the career path for Relationship Manager

Accountant

Accountants are responsible for maintaining financial records and preparing financial statements, and this course may be helpful by explaining how debt works. The course includes an overview of the different types of credit and loans, as well as how companies use debt financing. This course may be useful for an accountant by covering topics like amortization schedules and capital expenditure. Understanding credit and debt from this course can help accountants provide more informed financial analysis.

See salaries and explore the career path for Accountant

Financial Advisor

Financial advisors provide clients with financial planning and investment advice. While not directly related to all aspects of the job, this course may be helpful as it covers the ways loans and credit work. The course may be useful for financial advisors who need to incorporate debt into their financial planning for clients. It discusses different loan types, capital expenditures, the 5 Cs of Credit, and the use of financial ratios, all of which can be used to assess financial health.

See salaries and explore the career path for Financial Advisor

Insurance Broker

Insurance brokers sell insurance policies to businesses and individuals and this course may be useful in learning the basics of risk assessment. The course covers loan characteristics, different types of interest, and the role of collateral. The 5 Cs of Credit and the use of qualitative and quantitative assessments provided in this course may be helpful for insurance professionals when determining risk. This course may help an insurance broker to understand the financial implications of offering insurance to particular individuals and businesses.

See salaries and explore the career path for Insurance Broker

Sales Representative

A sales representative sells goods or services, and this course may provide some context for how financing supports purchases. The course introduces the concepts of credit and lending and discusses capital expenditures. The concepts covered in the course, such as the different types of interest and loans, may be helpful for sales representatives in understanding the financial considerations of their clients. A sales representative may benefit from an overview of the credit process, though the course is not directly related to sales.

See salaries and explore the career path for Sales Representative

Reading list

We've selected one books that we think will supplement your learning. Use these to develop background knowledge, enrich your coursework, and gain a deeper understanding of the topics covered in Fundamentals of Credit.

Putting Knowledge to Work

Save

Provides a practical guide to understanding financial statements and key financial concepts. It is helpful for those who need to interpret financial information but lack a formal accounting background. It is particularly useful for understanding the financial health of a business and making informed credit decisions. This book adds breadth to the course by providing a real-world perspective on financial analysis.

Putting Knowledge to Work

Paperback

Check price

Putting Knowledge to Work

Kindle Edition

Check price

Fundamentals of Credit

What's inside

Syllabus

Good to know

Save this course

Activities

Career center

Reading list

Share

Similar courses