April 24, 2024

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The average credit score falls for the first time in 10 years

The average credit score falls for the first time in 10 years

The average credit score fell for the first time since 2013, according to Ficoa data analysis company whose credit scoring models are used in 90% of lending decisions.

In October 2023, the latest period for which data is available, the average FICO score was 717. This represents a decline of one point from April of that year when it reached a record high of 718.

Introduced in 1989, FICO scores range from 300 to 850. Despite the decline, 717 is still considered a “good” credit score (670 to 739).

High interest rates and “persistent inflation” They have been cited as factors contributing to more missed payments and increased debt levels. On-time payments account for 35% of a person's total FICO score calculation, and as of October 2023, just over 18% of Americans were at least 30 days late on one or more credit cards — a 4% increase from April 2023. Credit cards will reach $1.13 trillion in the fourth quarter of 2023, according to Reuters. Federal Reserve Bank of New YorkAn increase of $50 billion over the previous quarter.

A strong labor market, slowing inflation and removing medical debt from information sent to the three major credit reporting bureaus helped avoid a further decline, FICO said.

If your FICO score is below average, there are still credit cards you can get approved for. One of the easiest cards you can get is Discover it® Secured Credit Card, which has no credit score requirements and, unlike most secured cards, earns rewards. Cardholders automatically earn 2% cash back at gas stations and restaurants, up to $1,000 per quarter, and unlimited 1% cash back on all other purchases. As a welcome bonus, Discover will match all cash back you earn after the first 12 months.

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Seven months after you open the account, Discover will automatically review your account to see if you can move to an unsecured line of credit and return your $200 security deposit.

Discover it® Secured Credit Card

  • Rewards

    Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases per quarter, automatically. Plus get unlimited 1% cash back on all other purchases.

  • Welcome bonus

    Discover will match all the cash you've earned at the end of your first year

  • Annual fee

  • Introduction April

  • Normal April

  • Balance transfer fees

    3% upfront fee for balance transfer, and up to 5% fee on future balance transfers (see terms)*

  • Foreign transaction fees

  • Credit needed

Read our Discover it® Secured Credit Card Review.

Capital One Quicksilver One Cash Rewards Credit Card

  • Rewards

    Unlimited 1.5% cash back on every purchase, and up to 6 months of free Uber One membership statement credits through 11/14/2024

  • Welcome bonus

  • Annual fee

  • Introduction April

  • Normal April

  • Balance transfer fees

    $0 at Conversion APR, 4% of the amount of each Conversion Balance posted to your account at the promotional APR that Capital One may offer you

  • Foreign transaction fees

  • Credit needed

    Average, fair, or limited

be seen Prices and fees. Conditions apply.

FICO divides its credit scores into five categories:

  • Weak: 300 to 579
  • Adel: from 580 to 669
  • Good: 670 to 739
  • Very good: from 740 to 799
  • Excellent: 800 to 850

There are plenty of benefits to getting a good score or better, like getting a lower mortgage rate or a credit card with competitive rewards. If you want to improve your score, there are several easy ways to do so.

Your payment history is the biggest factor in your FICO score, so paying bills on time and in full is the best way to increase your score. You can also ask your credit card company to increase your credit limit, which will lower your credit utilization ratio (but only if you leave the additional available credit intact).

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Experian Enhancement™ It's a free service that links on-time utility, phone, and subscription payments to your Experian credit report. Members also get free credit monitoring and a free copy of their FICO scorea result.

According to the company, users whose FICO scores improve see an average increase of 13 points.

Experian Enhancement™

  • it costs

  • Average credit score increase

    13 points with varying results

  • Affected credit report

  • The credit rating model used

Results will vary. See website for details.

Credit reports sometimes include errors that can accidentally lower your score. Experian IdentityWork℠ Premium It reviews data from the three credit bureaus and notifies users of changes in scores, inquiries, new accounts, changes in personal information, and suspicious activities. It also provides regular updates on your baseline FICO score.

Experian IdentityWorks℠

  • it costs

    Free for 30 days, then $9.99 to $19.99 per month

  • Monitor credit bureaus

    Experian for the Plus plan or Experian, Equifax, and TransUnion for the Premium plan

  • The credit rating model used

  • Dark web scan

  • Identity insurance

    Yes, up to $500,000 for the Plus plan and up to $1 million for the Premium plan*

*Identity theft insurance is underwritten by American International Group, Inc.'s insurance companies or affiliates. (AIG). The description contained herein is a summary and is intended for informational purposes only and does not include all terms, conditions and exceptions to the policies described. Please refer to actual policies for terms, conditions and coverage exclusions. Coverage may not be available in all legislation.

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*Results may vary. Some may not see improved results or odds of approval. Not all lenders use Experian credit files, and not all lenders use scores affected by Experian Boost.

Editorial note: The opinions, analyses, reviews or recommendations contained in this article are those of the specific editorial team alone and have not been reviewed, approved or endorsed in any way by any third party.