{"id":20964,"date":"2025-09-21T20:48:40","date_gmt":"2025-09-21T20:48:40","guid":{"rendered":"https:\/\/finderica.com\/?p=20964"},"modified":"2025-09-21T20:48:40","modified_gmt":"2025-09-21T20:48:40","slug":"credit-scores-fall-year-over-year-more-borrowers-miss-payments","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=20964","title":{"rendered":"Credit scores fall year over year, more borrowers miss payments"},"content":{"rendered":"
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The national average credit score \u2014 which had been steadily increasing for over a decade \u2014 fell for the second year in a row, according to a\u00a0new report<\/a> from FICO, developer of one of the scores most widely used by lenders.<\/p>\n

The average score is now 715, down from 717 in 2024 and 718 in 2023. FICO scores range between 300 and 850.<\/p>\n

High interest rates and higher prices have been a drag on many Americans’ financial standing. Consumers, overall, are falling\u00a0deeper into debt, causing an increase in\u00a0credit card balances\u00a0and an increase in missed payments, FICO found. That contributed to the average score decline.<\/p>\n

“I’m not surprised that credit scores are slipping,” said Matt Schulz, chief credit analyst at LendingTree. “Millions of Americans are struggling mightily in the face of stubborn inflation, high interest rates, a difficult job market and overall economic uncertainty \u2014 and tough times often force tough decisions.”<\/p>\n<\/div>\n

<\/a>Student loan delinquencies are key factor<\/h2>\n
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The resumption of federal\u00a0student loan delinquency reporting\u00a0on consumers’ credit was another significant contributing factor to declining scores, according to FICO.<\/p>\n

In a March\u00a0report<\/a>,\u00a0the Federal Reserve Bank of New York warned that\u00a0student loan borrowers\u00a0who are late on their payments would experience “significant drops” in their credit scores.<\/p>\n<\/div>\n

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Initially, those borrowers benefitted from the pandemic-era forbearance on federal student debt, which\u00a0marked all delinquent loans as current. Median credit scores for student loan borrowers increased by 11 points between the end of 2019 to the end of 2020, the Fed researchers found. However, that relief period officially ended on\u00a0Sept. 30, 2024<\/a>.<\/p>\n

More from Personal Finance:<\/strong>
More consumers use rent payments to boost their credit score
Some jobs may not qualify for the ‘no tax on tips’ policy
Trump administration to warn families about student debt risks<\/p>\n

The resumption of student loan delinquency reporting led to a spike in the rate of recent, severe delinquencies, according to FICO’s report.<\/p>\n

Further, student loan delinquencies could continue to increase in the months ahead, largely due to changes in the availability of\u00a0income-driven repayment plans, according to Tommy Lee, senior director of scores and predictive analytics at FICO.<\/p>\n<\/div>\n

<\/a>Not all borrowers are struggling<\/h2>\n
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While the recent “K”-shaped economic recovery caused financial stress for some borrowers, others have strengthened their financial position. Now, more consumers score in the highest and lowest score ranges, FICO also found.<\/p>\n

“While the average score has gone down, there are consumers who are benefiting from all-time highs in the stock market and appreciating home prices,” said Lee. “<\/strong>They’ve become wealthier with the dynamics in the stock market and the real estate market.”<\/p>\n<\/div>\n

<\/a>How to get a better credit score<\/h2>\n
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For those who have suffered the consequences of lower credit scores, which could include reduced credit limits, higher interest rates for new loans and restricted credit access overall, there are ways to boost your score almost immediately, experts say.<\/p>\n

“One of the important things to know is that FICO scores are dynamic,” Lee said.<\/p>\n

Some of the best ways to\u00a0improve your credit score\u00a0come down to paying your bills on time every month, only applying for credit as needed and keeping your utilization rate, or the ratio of debt to total credit,\u00a0below 30%\u00a0to limit the effect that high balances can have, Lee said.<\/p>\n<\/div>\n

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Increasing your credit score to very good (740 to 799) from fair (580 to 669) could save you more than $39,000 over the lifetime of your balances, an analysis earlier this year by\u00a0LendingTree<\/a>\u00a0found\u00a0\u2014 with the largest impact from lower mortgage costs, followed by preferred rates on credit cards, auto loans and personal loans.<\/p>\n

“There’s very little in life that’s more expensive than having crummy credit,” LendingTree’s Schulz\u00a0said. “It can cost you tens of thousands of dollars over the years in fees and interest.”<\/p>\n

Subscribe to CNBC on YouTube.<\/strong><\/em><\/a><\/p>\n<\/div>\n<\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The national average credit score \u2014 which had been steadily increasing for over a decade \u2014 fell for the second year in a row, according to a\u00a0new report from FICO, developer of one of the scores most widely used by lenders. The average score is now 715, down from 717 in 2024 and 718 in<\/p>\n","protected":false},"author":1,"featured_media":20965,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[378,238,944,474,2139,257],"class_list":{"0":"post-20964","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-borrowers","9":"tag-credit","10":"tag-fall","11":"tag-payments","12":"tag-scores","13":"tag-year"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/20964","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20964"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/20964\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/20965"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20964"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20964"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20964"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}