myFICO Blog

The following guest post by Andrew Jennings was originally published on the FICO Banking Analytics Blog.

Lately I’ve been examining the results of our latest quarterly survey of US bank risk managers. One item of note was regarding the outlook for credit availability.  In a positive sign, our survey found that lenders expected the supply of credit to satisfy demand for all types of consumer loans in the second half of this year. It’s a change from last quarter when survey respondents expected the credit supply for residential mortgages to fall short of demand.

Are you expecting a big tax return and dreaming of spending it on a sunny tropical vacation or a new wardrobe? Think twice. Although it may not be as glamorous as a week on the beach, using your return to pay down your credit card debt will do far more to contribute to your long-term dreams.

A survey conducted by Capitol One revealed that 33 percent of Americans planned to spend part or all of their tax refund this year.

“Most people are not factoring their annual return into their overall financial plan and long-term objectives,” says Mickey Konson, Managing Vice President for Retail Banking at Capital One Bank.  “A tax refund is often seen as free money, which makes it very tempting to spend it right away, but it’s important to remember that the refund you’re getting back is your own money. Tax season is a good opportunity for people to plan ahead, with an eye toward their future goals and financial health.”