Average Credit Scores Sees First Decline in More Than a Decade

March 7, 2024

Amid a period of rampant inflation, more Americans have been relying on credit cards to make ends meet, and for many, now that the bills have come due, they’re falling behind.

The average credit score in the U.S. fell to 717 in the beginning of 2024, down from 718, according to a report from FICO, the analytics company responsible for the most widely used credit score. The downturn is due largely to missed payments and rising consumer debt levels.

While that decline may be minuscule, it marks the first time in more than a decade that the nation’s average score has fallen. 

The average credit score in the U.S. bottomed out at 686 in October 2009, when the housing crisis led to a wave of foreclosures. Since then, it had been climbing steadily until the onset of the Covid-19 pandemic in early 2020. The government’s stimulus programs and a spike in household savings pushed credit scores to an all-time in April 2023.

FICO credit scores range between 300 and 850, and America’s current average would still be considered “good” by most lenders, but it remains to be seen if this is a one-off decline or the beginning of a sustained trend as borrowers fall further behind on payments.

The one-two punch of still-elevated inflation and higher interest rates has weighed on Americans’ household budgets. Consumers are falling deeper into debt, leading to an increase in credit card balances and fewer on-time payments, according to FICO.

As of October, credit card utilization was at 35%, up from 33% a year earlier. Roughly 18% of borrowers had missed payments that were more than 30 days past due, up from 16.5% a year prior. At the same time, the savings rate has trended back down after spiking during the pandemic and the savings cushion that they amassed during that period has been spent down for many consumers.

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