error

“`html

Average FICO Score in the U.S. Climbs to 715

The average FICO® Score in the United States reached 715 in 2023, according to Experian data. This marks a one-point increase from the 714 average in the third quarter (Q3) of 2022. Notably, this is the 10th consecutive year without an annual decrease in average FICO® Scores, with the last decline occurring in 2013.

Key Consumer Credit Highlights of 2023

Despite economic challenges, consumer finances have remained robust. Factors such as economic growth, near-full employment, lower delinquency rates, and a more informed consumer base have contributed to the rise in average FICO® Scores over the past decade. Consumers are increasingly aware of the importance of credit scores, which play a crucial role in financial transactions like auto financing and credit card purchases.

Average Credit Scores by Age Increase Slightly for Most

FICO® Score increases were observed across most generations, with the Silent Generation being the exception. Younger generations generally have good scores, while older generations have very good scores.

Average Credit Score by Age:

• Silent Generation (78+): 760 (no change)
• Baby Boomers (59-77): 745 (+2 points)
• Generation X (43-58): 709 (+2 points)
• Millennials (27-42): 690 (+3 points)
• Generation Z (18-26): 680 (+1 point)

Average Credit Score by State Changes Slightly

Most states saw little to no change in average FICO® Scores, indicating stable consumer credit. However, states like Kentucky, Maine, New Mexico, Oklahoma, South Carolina, and West Virginia experienced a three-point increase.

Credit Utilization Ratios Increase as Lenders Mind Credit Limits

Lenders have become more cautious about extending credit, leading to a rise in credit utilization ratios. The average overall credit utilization ratio increased from 28% in 2022 to 30% in 2023. Higher utilization ratios can negatively impact credit scores.

Delinquency Rates Return to Normal Levels, but Trend Is Still Upward

Delinquency rates, which were unusually low during the pandemic, have returned to normal levels. As of Q3 2023, 2.45% of credit card accounts were 30 or more days past due, up from 2.07% in Q3 2022. Mortgage delinquencies remain low, with only 1.88% of mortgage borrowers behind on payments in Q3 2023.

Where Consumers Stand Heading Into 2024

While average balances for most types of debts were higher in 2023 than in 2022, the rate of increase has slowed. Average FICO® Scores remain healthy, increasing by one point from 714 to 715 in 2023. This places the average FICO® Score in the higher end of the good credit score range.

Why Are Average Scores Significantly Higher Than 10 Years Ago?

Several factors contribute to the steady increase in credit scores over the past decade. Decreasing unemployment levels, demographic changes, and improved credit education have all played a role. More consumers are now willing and able to pay their bills, contributing to higher credit scores.

Most Consumers Claim to Know Their Credit Score

According to a survey by Experian, nearly 4 in 5 consumers say they know their credit score. Younger consumers (ages 18 to 24) are less certain, as many are just beginning to manage their finances.

How to Improve Your Credit Score

For those with exceptional credit scores of 800 or higher, continuing to make on-time payments can help maintain their scores. For others, the following tips can help improve credit scores:

• Pay all bills on time.
• Reduce credit card balances.
• Apply for credit only when needed.

Adhering to these suggestions can improve credit scores for most people. Additionally, the longer you maintain good credit habits, the older your credit history becomes, which positively influences credit scores.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We are here to help you with all your mortgage needs!

“`