Consumer credit picture shows a few bright spots

A new survey offers some hope that consumers are doing a better job staying out of financial trouble with mortgages, credit cards and car loans.

An increasing number of risk managers for lenders and other financial institutions expect delinquency levels will drop on most types of credit, though the survey still found much pessimism about many consumers' ability to repay what they owe.

The survey, released Wednesday, is conducted quarterly by Minneapolis-based Fair Isaac Corp. and the Professional Risk Managers' International Association based in Northfield. It was based on 263 responses.

Andrew Jennings, Fair Isaac's chief analytics officer, said the findings are consistent with other signs of a slowly improving U.S. economy.

"One swallow doesn't make a summer, but we've got more than one swallow in the sky," said Jennings.

The survey queried risk managers about six types of consumer credit: mortgages, home equity, credit cards, auto loans, small business loans and student loans.

Of those surveyed, 26 percent said they expect fewer people will fall behind on their mortgages in the next six months. That shows more optimism than in the previous quarter and a year ago. The rest either think delinquencies will rise or stay the same.

The outlook was similar for auto loan delinquencies. Of the risk managers surveyed, 30 percent now expect such delinquencies to fall, reflecting more optimism than in the previous quarter, but more pessimism than a year ago.

Risk managers had bleak views of student loans. Nearly 90 percent of those surveyed expect student loan delinquencies to rise or stay the same in the next six months.

The survey also found that risk managers worry about increasing "strategic defaults" on mortgages by borrowers who fall behind and choose to pay credit cards and other debts first. Nearly half of respondents said they expect the volume of strategic defaults this year to surpass last year's levels. About half said they think the current generation of homeowners doesn't feel a mortgage is the most important credit obligation.

"We've not observed this type of behavior prior to the housing crash," Jennings said in an interview. "The mortgage market has a longish way to go before it corrects."