There are two types of finance qualifications. In one sense, they can be used to describe the educational requirements for specific financial sector jobs, or they can be used to describe the requirements that financial institutions have for lending money to potential borrowers. These requirements differ from one job to the next and from one financial product to the next.
A bachelor’s degree is one of the prerequisites for working in the financial industry. Bank tellers and low-level accountants can often work with high school diplomas or two-year degrees, but positions that require certifying tax filings typically require a four-year college degree. Before they can certify filings, accountants usually need to obtain additional certification for working with their particular government’s tax code. Lower-level accountants will work under the supervision of a certified accountant, who will be responsible for the accuracy of their work.
Financial planners are in charge of putting their clients’ money and investments in order. These professionals must understand how various investment vehicles work and how to read market movements. These abilities are required for a financial planner to know how to distribute each client’s money among various investment vehicles in order to meet their specific financial objectives. A four-year bachelor’s degree in business or economics, as well as any professional development courses that large financial institutions may require planners to complete, are typical finance qualifications for this position.
When a borrower applies for a bank line of credit or a loan, the bank will have its own set of requirements that the applicant must meet. These are also known as finance credentials. One of these requirements is usually that the borrower has a sufficient income to repay the loan. The higher the loan amount, the higher the income a bank will typically demand from the borrower. Prospective borrowers will need to show proof of income in the form of pay stubs or letters from their employers confirming their earnings.
The bank will have finance qualifications based on the borrower’s credit history in addition to his or her current income. Individuals with a good credit history who have always paid their loans and credit cards on time and responsibly have a better chance of getting a loan than those with a bad credit history. Financial institutions may still extend credit or loans to people with bad credit, but the amount of credit or the size of the credit line will be smaller and the interest rates will be higher. These smaller loans protect the financial institution from losing a large sum of money if the borrower defaults, and the higher interest rate compensates the bank for taking the risk of lending the borrower money.