The average credit score has dropped for the first time in a decade — how does yours stack up? (2024)

FAQs

Have FICO scores dropped for the first time in 10 years? ›

The average credit score has fallen for the first time since 2013, according to FICO, the data analytics firm whose credit scoring models are used in 90% of lending decisions. In October 2023, the most recent period for which data is available, the average FICO score was 717.

The average credit score has ticked down for the first time in over a decade. The drop is just one point, from 718 to 717, but it's still a major indicator that Americans are struggling with debt.

Top ways to raise your credit score

You can accomplish this action by paying down debt, upping your credit limit or opening a new credit account. Additionally, there are a couple other things you can do to start your journey to an increased score, including the following: Make credit card payments on time.

Some of the main reasons your credit score goes down might include: You applied for new credit. You have repeated hard credit searches. You have negative markers on one or more accounts.

A credit reporting company generally can report most negative information for seven years. Information about a lawsuit or a judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Bankruptcies can stay on your report for up to ten years.

Heavy credit card use, a missed payment or a flurry of credit applications could account for a credit score drop. Amanda Barroso is a personal finance writer who joined NerdWallet in 2021, covering credit scoring.

According to a report by FICO, only 23% of the scorable population has a credit score of 800 or above.

Highlights: While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.

Consider yourself in “good” shape if your credit score is above the average for people in your age group. Given that the average credit score for people aged 18 to 25 is 679, a score between 679 and 687 (the average for people aged 26 to 41) could be considered “good”.

Credit scores can drop due to a variety of reasons, including late or missed payments, changes to your credit utilization rate, a change in your credit mix, closing older accounts (which may shorten your length of credit history overall), or applying for new credit accounts.

How to raise your credit score 200 points in 30 days? ›

In fact, some consumers may even see their credit scores rise as much as 100 points in 30 days. Steps you can take to raise your credit score quickly include: Lower your credit utilization rate. Ask for late payment forgiveness.

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs).

Consistently paying off your credit card on time every month is one step toward improving your credit scores. However, credit scores are calculated at different times, so if your score is calculated on a day you have a high balance, this could affect your score even if you pay off the balance in full the next day.

In order to earn good credit, you need to show creditors you can make payments on time and use your credit cards responsibly without maxing them out. Since Ramsey doesn't borrow, he won't be able to do that. And, for the finance guru, it's just fine not to have a credit score.

If you haven't used credit in more than 10 years, your old accounts have most likely dropped off your credit report by now, which means there's nothing in your credit history to score.

Credit scores can drop due to a variety of reasons, including late or missed payments, changes to your credit utilization rate, a change in your credit mix, closing older accounts (which may shorten your length of credit history overall), or applying for new credit accounts.

Late last year, we reported that after a 2-point increase from the year prior, the national average FICO® Score held steady from April 2023 to July 2023 at 718. The latest credit score data is in and as of October 2023, the national average FICO® Score now stands at 717.

You can generally expect your credit score to update at least once a month, but it can be more frequently if you have multiple financial products. Each time any one of your creditors sends information to any of the three main credit bureaus — Experian, Equifax and TransUnion — your score may refresh.