Americans’ credit scores are falling. Here’s how to fix it

Core Insights - American consumers are experiencing a slight decline in credit scores, with the average score dropping to 715, down two points year over year [1][2] Group 1: Credit Score Trends - The decline in credit scores is attributed to increased delinquencies in auto loans, which have risen by 24% since 2021, and credit cards, which have increased by 48% over the same period [2] - Credit utilization rates have also increased, currently at 35.5% compared to 29.6% in 2021, indicating consumers are using a larger portion of their available credit [2] Group 2: Factors Influencing Credit Scores - The restart of federal student loan collection activities in February has contributed to the decline, with 3.1% of federal student loan borrowers experiencing delinquencies added to their credit reports [3][4] - Outstanding credit card balances reached $1.21 trillion in Q2 2025, a 5.87% increase from the previous year, further driving up credit utilization rates [5] Group 3: Economic Implications - The decline in credit scores may indicate underlying issues in Americans' financial health, potentially leading to a slowdown in consumer spending, which constitutes about two-thirds of U.S. economic activity [7] - Consumers may resort to high-interest financial products, such as credit cards with average interest rates above 21%, to manage expenses, which could exacerbate financial difficulties [8]