European borrowers headed for trouble

The latest European Credit Risk Outlook, based on a survey of risk managers by FICO and Efma, gives a different picture than the one we released in June. The optimism in that report has largely slipped away.

Credit risk managers across Europe now expect that more consumers will have trouble making payments on a variety of loan types. In fact, the ratio of respondents who predict delinquencies will get worse to those who predict delinquencies will get better is about 4:1 for overdrafts, small business loans and credit cards, and 3:1 for auto loans and mortgages.

A darker picture also emerged in FICO’s most recent survey of U.S. risk managers. It remains to be seen whether the forthcoming solutions to the Eurozone crisis will affect what risk managers worldwide see as darker times ahead for credit users.