US credit availability will fall short of
consumer demand until the end of the year, according to FICO.
The third-quarter credit survey, conducted for
FICO by the Professional Risk Managers’ International Association
said:
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- While the vast majority of respondents expect
credit applications to increase or remain steady, almost half of
the bankers surveyed expect approval criteria to become more strict
over the next 6 months; - As a result 38% of respondents expect the
approval rate for credit applications to decline, and - Delinquencies (30 days past due) are expected
to grow further, in particular in the retail mortgage sector, with
53% of respondents forecasting an increase.
Respondents were split in their views on
delinquency trends relating to credit cards, and student loans,
with a small majority expecting a slight increase in
delinquencies.
In the credit cards sector, opinions were also
mixed with 39% of respondents expecting an increase in total
outstanding balances; 22% said they would remain about the same
with 34% stating they would decrease.
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