A majority of bank risk executives surveyed by FICO believe consumers havefinished paying down debt in the wake of the Great Recession andare ready to borrow again.

The decision management software company known for its creditscoring software reported that 60% of executives surveyed saidthey expected the amount of credit sought by consumers and theamount offered by lenders to reach equilibrium over the next sixmonths.

FICO conducted the survey in conjunction with the ProfessionalRisk Managers' International Association and found that 61% of thembelieve credit card balances will increase over the next six monthsand 26% believe credit card account delinquency will also rise.

“This is the first time since we initiated the survey in 2010that expectations for the growth of credit demand did not exceedexpectations for the growth of credit supply,” said AndrewJennings, chief analytics officer at FICO and head of FICOLabs.

“This shows the strength of the U.S. economic recovery and is insharp contrast to what we see in Europe,” Jennings said.

“Findings of our latest survey of European bankers show thattwice as many UK lenders think the amount of credit requested willrise, compared with those who think the availability of credit willdo so. These results say quite a bit about the psychology ofborrowers and lenders,” Jennings continued.

“After years of caution, lenders are now in growth mode andfeeling good about extending credit. But I find the borrower sideof the equation even more intriguing. It appears that borrowers arebeginning to shed the frugal habits that helped them deleverage tothe tune of more than a trillion dollars since 2008,” Jenningsadded.

In addition, strong majorities of executives surveyed expectedthat delinquencies will either remain steady or drop across allmajor loan types except for student loans. Seventy-sixpercent of executives surveyed expect steady to lower delinquencyin car loans, 85% in home equity loans, 88% in housing financeloans, 77% in small business loans but only 44% expected steady orlower delinquencies in student loans.