FICO Survey: U.S. Household Deleveraging May Be Coming to an End

Surveys & Market Data
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SAN JOSE — January 10, 2013 — In FICO’s latest quarterly survey of U.S. bank risk professionals, a large majority of bankers said consumers will be applying for more new credit and trying to bump up the limits on existing credit accounts over the next six months. Bankers are also expecting balances on credit cards to increase during the first half of 2013. These expectations are in stark contrast to the significant household deleveraging that has taken place over the past five years.

The survey, conducted for FICO by the Professional Risk Managers’ International Association (PRMIA), also found that bankers expect the supply of consumer credit to satisfy the growing demand. A majority of respondents believe the supply of financing for auto loans, credit cards, new mortgages, small business loans, student loans and mortgage refinancing will meet or exceed consumer demand over the next six months.

Are Americans ready to releverage?
The FICO survey found that 61 percent of bankers expect an increase in the number of requests for credit line increases over the next six months. The same percentage of respondents expect the amount of new credit requested by consumers to increase during that time. Both those results are the highest FICO has seen during the 11 quarters it has been conducting this survey. In addition, 59 percent of bankers polled expect credit card balances to increase, which is the second-highest figure seen throughout the history of the survey.

“These results indicate that 2013 could be the year that Americans begin to embrace credit again, after the considerable deleveraging we’ve seen since 2008,” said Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. “With both the job market and real estate sector showing signs of life, American consumers may again be willing to fund their lifestyles by taking on more debt. And it appears that banks are willing to oblige.”

Credit supply expected to keep pace with demand
Along with expectations for increased consumer demand, the majority of survey respondents are expecting an ample supply of credit in the months ahead. The percentage of respondents expecting credit supply to meet or exceed demand was as follows:

  • Car loans


  • Credit cards


  • Student loans


  • Mortgage refinancing


  • Small business loans


  • New mortgages


Nearly half of respondents believe demand for mortgages will surpass supply, which may be another indication that consumers are ready to releverage.

Bankers still want consumers to be cautious
Despite the survey results pointing towards an end of household deleveraging, the survey found that most bankers would like to see consumers remain cautious with their finances. Over 70 percent of bankers polled believe consumers should either save their money or pay off debts. Specifically, respondents were asked what advice they would give to typical consumers heading into 2013. Here is the breakdown of their responses:

  • These are uncertain times; save your money


  • Pay down as much debt as possible


  • Money is cheap; it’s a good time to borrow for big-ticket items


  • Maximize your available credit, in case you need it


A detailed report of FICO’s quarterly survey is available at The survey included responses from 251 risk managers at banks throughout the U.S. in December 2012. FICO and PRMIA extend a special thanks to Columbia Business School’s Center for Decision Sciences for its assistance in analyzing the survey results.

The Professional Risk Managers’ International Association (PRMIA) is a higher standard for risk professionals, with 65 chapters and nearly 90,000 members worldwide. A non-profit, member-led association, PRMIA is dedicated to defining and implementing the best practices of risk management through education, including the Professional Risk Manager (PRM) designation and Associate PRM certificate; webinar, online, classroom and in-house training; events; networking; and online resources. More information can be found at

About FICO
FICO (NYSE:FICO) delivers superior predictive analytics solutions that drive smarter decisions. The company’s groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO’s innovative solutions include the FICO® Score — the standard measure of consumer credit risk in the United States — along with industry-leading solutions for managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world’s top banks, as well as leading insurers, retailers, pharmaceutical companies and government agencies, rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands. FICO also helps millions of individuals manage their personal credit health through

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Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Decision Management strategy and reengineering plan, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2012. If any of these risks or uncertainties materializes, FICO’s results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.

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