Even as unemployment remains historically low and recession fears fade, consumer credit scores are starting to buckle. The national average FICO score dipped to 717 as of October, down from 718 in July, according to data released Wednesday by FICO, an analytics company that evaluates the strength of borrowers, CNN.com reported. Although FICO scores remain near record highs — and well above pre-pandemic levels — this marks the first drop in a decade. “The effects of high interest rates and persistent inflation may be starting to weigh on consumers, especially those already struggling to manage their finances,” Can Arkali, FICO’s senior director of scores and predictive analytics, wrote in the report. FICO said the one-point drop in credit scores in late 2023 was driven by an increase in Americans missing payments and also by rising debt levels. The last time credit scores fell was between April and October 2013, when the average FICO score dropped by two points, to 690. Credit scores have steadily increased since then — even during the turmoil of the COVID-19 pandemic. Although job loss spiked during Covid, stimulus checks and forbearance from banks and credit card companies helped many consumers avoid financial trouble.
