Credit scores just plunged at fastest pace since Great Recession — how does your FICO compare to the new average?

Core Insights - The FICO report indicates a significant rise in delinquency rates across various loan types, particularly affecting Gen Z, with student loan delinquency reaching a record high of 3.1% and Gen Z holding 34% of open student loans [1][5]. - The average American credit score has dropped by 2 points to 715, marking the largest decline in over 15 years, with Gen Z experiencing the most substantial credit score drop [6][7]. Delinquency Rates - Personal loan delinquency has increased to 6.1%, surpassing 2019 levels of 5.6% and nearing the Great Recession peak of 7% [2]. - Bankcard delinquency rates have reached 11.7%, just 2% shy of the peak during the Great Recession [3]. - Car loan delinquency has stabilized year over year but is still up 24% since 2021 [2]. Economic Context - The report suggests that the current delinquency rates are more indicative of a recessionary economy rather than one in expansion, attributed to rising debt levels, missed payments, economic uncertainty, and higher consumer prices [4]. - The average credit score drop is linked to these economic factors, with a noted 2-point decrease in the average credit score since April 2009 [6]. Gen Z Specifics - Gen Z has seen an average credit score drop of 3 points, the largest among generational cohorts, primarily due to student loan delinquency [5]. - Despite challenges, Gen Z shows potential for credit score improvement through responsible credit behaviors, with 9.8% experiencing a credit score increase of over 50 points since 2024 [8][11]. Credit Score Distribution - A five-year high of 24.8% of American consumers are now in the top credit score range of 800 to 850, highlighting a disparity in financial health among different economic groups [10]. - The FICO report emphasizes that 90% of American consumers have made efforts to improve their financial health in the past year [12].