ATLANTA — Michael Busick says his credit union “was shocked” to discover his credit score was 812 of a possible 850 when he applied for a $19,500 new car loan.

The loan officer told Busick he rarely sees scores so close to perfect, said the Charlotte, N.C., math teacher, who added that he always pays his bills on time and doesn’t “overextend.” He got the funds in May.

The average U.S. credit score – a predictor of the likelihood lenders will be paid back – rose to 696 in May, the highest in at least four years, according to Equifax Inc., a provider of consumer credit data. The ratio of consumer debt payments to incomes is the lowest since 1994, and delinquencies have dropped 30 percent in two years, Federal Reserve data show.

Improving credit quality gives households the ability to lift borrowing as concerns ease about gasoline prices, hard-to-find jobs and falling home prices. A reacceleration in spending would belie Morgan Stanley economist Stephen Roach’s assertion that consumers will be “zombies” for years because of too much debt.

“The financial situation of the household sector has improved far faster and far more than everyone thought it would two years ago,” said James Paulsen, chief investment strategist for Wells Capital Management in Minneapolis. “People are still locked into the view that consumers are facing record burdens, and they are not. There has been a change that is sustainable and durable.”

Bank senior loan officers reported a pickup in demand for auto loans in the second quarter, following first-quarter growth for all consumer lending – the first increase since 2005, according to a quarterly Fed survey released in May. About 29 percent were more willing to make consumer installment loans, the highest percentage since 1994, the survey found.

More borrowing could help spur growth slowed by higher gasoline prices, Paulsen said. That will make stocks more attractive than bonds, pushing the Standard & Poor’s 500 index up about 8 percent to 1,450 by year end, while raising the yield on 10-year Treasury notes more than half a point to 3.75 percent, he said.

Discover Financial Services’ shares have risen about 43 percent this year to $26.55 on July 1. The Riverwoods, Ill.-based credit card issuer reported a record second-quarter profit of $600 million on June 23, more than double a year earlier, as consumers spent more and defaulted less.

Consumers have reduced debt by more than $1 trillion in the 10 quarters that ended in March, according to data from the Federal Reserve Bank of New York. Roach, non-executive chairman of Morgan Stanley Asia, says they will retrench “a minimum of another three to five years.”

While household obligations are at a 17-year low because of increased savings and lower interest rates since 2007, debt remains high, he said. He calculates that it amounts to 115 percent of income, compared with a 75 percent average from 1970 to 2000.Consumers have reduced debt by more than $1 trillion in the past 10 quarters.