[FICO credit scores drop for first time in decade](https://www.axios.com/2024/03/07/credit-scores-drop-record-decade)
The national average FICO score has ticked lower.
Why it matters: Though just a 1-point drop from the last reading three months earlier, it’s the first time the score has decreased in a decade.
Between the lines: The downtick in the latest reading was driven by an increase in missed payments and rising debt levels for consumers, FICO creator Fair Isaac says.
In October 2023, just over 18% of the population had a 30-day or worse past-due payment in the last year, up 4% compared to April 2023.
Average credit utilization — the amount of available credit a borrower used — was 35% in October, up a percentage point from pre-pandemic 2019.
By the numbers: The latest metric, for October 2023, shows an average score of 717. It had been steadily increasing since October 2013, when it was 690.
After a 2-point increase from 2022, the score had held steady from April 2023 to July 2023 at 718.
The big picture: “Given that the FICO Score is a lagging, not leading, economic indicator, this suggests that the effects of high interest rates and persistent inflation may be starting to weigh on consumers, especially those already struggling to manage their finances,” FICO noted in the report.
by Narrow8576
8 comments
>If the economy is so good, why are FICO scores dropping?
Gee, let’s just ignore a multitude of differences in consumer behavior, beliefs, etc. …
Crazy we’re largely judged on our credit worthiness.
People are pretty dumb when it comes to finance. They love spending money they don’t have and they’re terrible at sticking to a budget
Plus people are borrowing less (can’t imagine why), and having a credit is part of the score too.
Because housing costs are still outpacing earnings. It’s a problem that requires gov’t action, but we keep putting people in charge who tell us what we want to hear instead of actually solving our problems.
Fico is an indicator of available credit. Interest rates went up so less people qualify for credit hence the drop.
This post is narrow minded like your name
Even with a shitty fico. There’s always someone willing to lend you money