SAN JOSE, Calif.–Members of Generation Z have seen the steepest drop in credit health in 2025, according to FICO’s Credit Insights Report.
According to the report, Gen Z’s average FICO score dropped to 676, compared to the national average of 715. Approximately 14% of Gen Z borrowers saw their score fall by 50 points or more, the largest share in five years, FICO reported.
According to the FICO analysis, reasons for the decline include resumption of student loan repayments, the rising cost of living, and less access to credit-building offerings. With underwriting of credit cards having also become stricter, many Gen Zers now rely on debit cards or buy now, pay later (BNPL) financing, which for the most part does help build a credit history.
Don’t Understand Scores
An additional contributor: many in Generation Z don’t understand how credit scores work, according to several analysts.
Research by PYMNTS Intelligence has shown that Gen Zers have an average of $5,948 of readily available cash, or dollars in the bank or at home. That’s compared to $8,594 on average for millennials and $9,313 for members of Generation X.
