MINNEAPOLIS — Results of a new study from FICO showed that bank risk managers believe consumers are finally regaining their credit health, which is why they expect the availability of car loans to consumers with damaged credit to increase.

The survey, conducted for FICO by the Professional Risk Managers’ International Association (PRMIA), also found that survey respondents expected delinquency rates on most types of consumer loans to remain flat or decline. The sole exception to this outlook was student loans, with most respondents expecting delinquencies to increase.

When asked about lending to borrowers with damaged credit, more than 50 percent of respondents expected the auto sector to see the largest increase in 2012, while 38 percent expected the largest increase to be in credit cards, and 12 percent expected the largest increase to be in residential mortgages. When asked about overall subprime lending activity, 44 percent of respondents felt that such lending in 2012 would remain flat compared to 2011.

“We are clearly seeing a loosening of credit in the auto finance market, with lenders responding to increased consumer demand,” said Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. “This is good news for car dealers and it should help the auto sector continue its recovery. However, underwriting for other types of consumer lending, particularly mortgages, is still tight. Lenders aren’t yet ready to increase their exposure for the sake of growing their mortgage portfolios.”

When asked about their expectations over the next six months, the majority of respondents expected delinquency rates to remain flat or decrease for credit cards (69%), car loans (77%), mortgages (73%) and small business loans (72%). However, a majority of respondents (64%) expected delinquencies on student loans to increase. This is the third consecutive quarter that respondents have predicted an increase in student loan delinquencies.

“I see these results as quite positive, save for student lending,” said Jennings. “Last quarter we saw a sharp uptick in sentiment regarding consumer credit, with more respondents expecting things to improve than we had seen at any point in the previous two years. Now lenders are expecting things to at least stay the same, and quite possibly improve further. These results indicate that bankers believe consumer health has turned a corner.”

The survey included responses from 192 risk managers at banks throughout the U.S. in June 2012. A detailed report of FICO’s quarterly survey results is available http://www.prmia.org/PRMIA-News/FICO-USConsumerCreditJuly2012.pdf.