Credit scores decrease for the first time in a decade; borrowers fall behind on payments

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Consumers have been increasingly relying on credit cards to make ends meet, and it may be finally catching up with them.

The national average credit score, which has steadily increased over the last decade, fell to 717 from a high of 718 in the beginning of 2023, according to a report from FICO, developer of one of the scores most widely used by lenders. FICO scores range between 300 and 850.

“It’s a notable milestone,” said Ethan Dornhelm, FICO’s vice president of scores and predictive analytics. “This is the first time in well over a decade that the score went down.”

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Average nationwide credit scores bottomed out at 686 during the housing crisis more than a decade ago, when there was a sharp increase in foreclosures. They steadily ticked higher until the Covid-19 pandemic, when government stimulus programs and a spike in household saving helped scores jump to a historic high in April 2023.

High interest rates and higher prices have weighed on most Americans’ financial standing. Consumers as a whole are falling deeper into debt, causing an increase in credit card balances and an uptick in missed payments, FICO found.

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