Houston, Texas – The average FICO score in the United States saw a decline for the first time since 2013, according to data from FICO, a leading data analytics firm widely used in lending decisions. In October 2023, the average FICO score dropped by one point to 717 from its record high of 718 in April of the same year.
Introduced in 1989, FICO scores range from 300 to 850, with a score of 717 still considered a “good” credit score falling in the range of 670 to 739. Factors such as high interest rates and persistent inflation have contributed to an increase in missed payments and higher debt levels among consumers. On-time payments play a significant role in an individual’s overall FICO score calculation, with over 18% of Americans being at least 30 days behind on their credit card payments in October 2023, a 4% increase from April of the same year. Additionally, credit card debt surged to $1.13 trillion in the fourth quarter of 2023, seeing a $50 billion increase from the previous quarter, as reported by the Federal Reserve Bank of New York.
Despite the decline in average credit scores, a strong job market, slowing inflation, and the removal of medical debt from credit reports have helped prevent a more significant drop in scores. FICO scores are categorized into five brackets ranging from Poor (300 to 579) to Excellent (800 to 850), with higher scores enabling access to better interest rates and credit cards with competitive rewards.
For individuals looking to improve their credit scores, making timely bill payments and maintaining a low credit utilization ratio are key. Services like Experian Boost™ offer a free way to link on-time payments for utilities and subscriptions to credit reports, potentially resulting in an average score increase of 13 points for users.
In conclusion, while the average FICO score has decreased slightly, it remains in the “good” range and still allows access to favorable financial opportunities. Taking proactive steps to improve credit scores, such as monitoring for errors and utilizing services like Experian IdentityWork℠ Premium, can help individuals maintain and enhance their creditworthiness.