Average U.S. FICO score dips as consumers struggle to make ends meet
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The average FICO credit score in the U.S. dipped near the end of last year, the first drop in a decade, signaling it may become tougher for some borrowers to finance big-ticket items like cars or houses.
The average score fell to 717 in October, down one point from six months earlier, according to Can Arkali, FICO’s Senior Director of Scores and Predictive Analytics. The share of consumers with late bill payments rose to 18% in October from 17% six months earlier, and the average credit card utilization ratio, measuring a consumer’s revolving debt to available credit, rose to 35% from 34%, Arkali said.
Consumers are struggling as higher prices sap their buying power, forcing more people to use credit for everyday purchases, while soaring interest rates make it tougher to make ends meet. The average credit card interest rate was 21.5% in May, according to the Federal Reserve, up from 15.1% two years earlier.
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