The average American FICO credit score has reached 718, a record high that reflects the completion of financial recovery from the pandemic era. The improvement is broad-based across age groups and income levels, though significant disparities persist.
The improvement is attributed to declining delinquency rates on mortgages and auto loans, reduced credit card utilization as consumers pay down debt, and the positive impact of new credit building tools including rent reporting and BNPL credit reporting.
Generational differences remain significant. Baby boomers average 745, Gen X averages 722, millennials average 700, and Gen Z averages 680. However, younger generations are improving faster, with Gen Z scores rising 15 points in the past two years.
The record-high average score has implications for lending. More consumers qualify for prime credit terms, potentially increasing demand for mortgages, auto loans, and credit cards. Lenders are cautiously expanding credit availability based on improved consumer credit health.
Credit scoring itself is evolving. FICO 10T and VantageScore 4.0 incorporate trended data that considers credit behavior over time, not just a snapshot. Alternative data sources including utility payments, streaming subscriptions, and bank account data are also being incorporated into some scoring models.
