Credit scores drop at fastest pace since Great Recession

Credit scores in the U.S. are dropping at the fastest pace since the Great Recession, driven by rising living costs and the restart of student loan payments. The national average FICO score fell by two points this year — the biggest drop since 2009 — with delinquencies on credit cards, auto loans, and personal loans nearing recession-era highs.

Young Americans, especially Gen Z, are hit hardest. Their average credit score dropped three points, and 14% saw declines of 50 points or more in the past year. This group is especially vulnerable because many carry student debt, have limited credit histories, and are facing one of the toughest job markets for recent graduates.

Student loan delinquencies surged after federal collections resumed in 2024, with 29% of borrowers missing payments. Many Gen Z and Millennial borrowers rely on credit cards or buy-now-pay-later loans to make ends meet.

Read more: CNN

 

 

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