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Credit Applications Expected to Boom in 2013

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Credit Applications Expected to Boom in 2013
January
17

FICO’s quarterly survey of risk managers at banks across the U.S. shows that 61% of them believe there will be more credit increase requests in the first half of 2013. They also expect an uptick in the number of applications for new credit cards, auto loans, mortgages, business loans, and student loans. And 59% believe there will be an increase in overall credit card balances.

Here is the breakdown by the percentage of anticipated successful applications:

  • Auto loans:  74%
  • Credit cards:  71%
  • Student loans:  68%
  • Mortgage refinancing:  61%
  • Small business loans:  53%
  • New mortgages:  53%

Experts advise caution

Even though they are optimistic about lending, bankers said consumers should prioritize paying off debt and saving money. Here are the priorities they set by order of importance:

  • Save money :  39%
  • Pay down debt:  33%
  • Borrow money now:  22%
  • Maximize your credit line:  12%

FICO analysts think the coming year will be the first since the recession when people will begin to take on more debt in order to finance their lifestyles. Consumers have shied away from getting too deeply in debt since 2008, with the exception of student loans, which have ballooned since then.  That’s due to the droves of people who lost their jobs and returned to the classroom in search of new job skills or a career change. Now as the country recovers from recession, consumer confidence is returning.

The survey was conducted for FICO by the Professional Risk Managers’ International Association (PRMIA). The survey included responses from 251 risk managers at banks throughout the U.S. in December 2012.

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