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Study Finds Consumers’ Appetite for Credit Will Continue to Grow

David Andrew 7/25/14

Since the economy has begun to recover from the financial crisis, Americans are starting to apply for credit again.

Financial risk professionals believe consumer demand for credit will just keep on growing, according to a new survey from FICO, the analytics and credit scoring company.

For this survey, FICO representatives contacted bank risk professionals in the United States and Canada and asked what they thought would happen with consumer credit over the next six months.

Forty-six percent of survey respondents thought consumers would take on more credit, while only 16 percent thought consumers would take on less credit.

Dr. Andrew Jennings, the chief analytics officer at FICO, believes this is in line with the overall economy.

“Consumers are becoming

comfortable spending more.”

The survey also showed financial professionals believe young people will drive new borrowing. Seventy-two percent of respondents said borrowers younger than 40 would create the most credit growth.

Survey respondents also believe most of the borrowing would come in the form of new mortgages and small business loans, further signs the economy is growing.

Financial professionals showed concerns over student loans. Nearly half the group thought delinquencies on student loans would increase over the next six months.

However, the group believes delinquencies for other types of debt would decrease or stay the same.

All in all, the FICO survey showed financial professionals are cautiously optimistic about the credit markets. Unless the country runs into another economic setback, consumers’ appetite for credit will continue to grow.

Source: newsroomamerica.com. Photo source: www.ecojetsystems.com

About David Andrew
David Andrew is a former New York Life financial adviser, holding Series 6 and Certified Financial Planner credentials from his years with the company. He also holds degrees in economics and finance from McGill University. David is now a well-published finance writer with special expertise in credit cards and auto insurance. In addition to his work on BadCredit.org, his articles have been featured on eHow, Zacks.com, TheNest.com, Chron.com and other popular sites. When he's not keeping up with the latest news in the world of finance, David enjoys playing tennis and golf.
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