US consumers feel the heat as early signs of stress surface in credit health

Core Insights - The average national FICO score has declined by approximately two points, indicating concerns about household resilience amid changing economic conditions [1][5] - The proportion of the population with scores in the 600–749 range has decreased from 38.1% in 2021 to 33.8% in 2025, suggesting a narrowing gap between strong and weak borrowers [1] - Generation Z has experienced the most significant decline in credit scores, attributed to increasing student loan obligations, with over 10% of 21 million tracked customers currently behind on repayments [2] Credit Health and Economic Context - Despite the slight decline in the average FICO score, which currently stands at 715, credit health appears resilient, remaining near record highs [5] - There is a contrast between the optimistic outlook of major banks, which claim consumer stability and quality credit portfolios, and the broader economic data indicating a cooling labor market that may impact future repayment capacity [3][6] - The tension between banks' confidence and FICO's warnings underscores the fragility of household finances, particularly for younger borrowers burdened by education costs [6]