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.

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.

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).

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 score a result.

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

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.

While the average FICO score in the United States fell by one point to 717, it is still considered a good credit score that gives you access to the best interest rates and credit cards with competitive rewards. If your score is below average, there are several ways you can improve it.

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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.