NEW YORK — Missed student loan payments are continuing to weigh on Americans’ credit scores, even as higher-income borrowers push averages upward, reflecting a widening divide in financial health, according to a report by FICO.
The national FICO score declined to 714, down one point from April 2025 and two points from October 2024, driven largely by the resumption of student loan delinquency reporting and a modest increase in mortgage delinquencies, the company said in its latest FICO Score Credit Insights report.
At the same time, a record 48.1% of consumers now have scores of 750 or higher, underscoring what analysts describe as a “K-shaped economy,” in which financial outcomes are increasingly uneven, according to the report.
“The result is a credit market that’s both more challenging for some and more rewarding for others,” Ethan Dornhelm, head of scores analytics at FICO, said in a statement.
Younger Consumers Feeling the Pressure
Younger consumers are among those feeling the most pressure. The share of Gen Z borrowers experiencing at least a 50-point drop in their scores rose to 14.4% from 11.3% over the past year, compared with an increase to 10.1% from 8.8% for the broader population. The report attributes much of that decline to ongoing student loan repayment challenges.
Despite those pressures, Gen Z consumers are actively using credit, opening new credit cards at higher rates than other age groups. FICO said the trend reflects more deliberate credit management rather than excessive spending.
Across all consumers, the FICO report found 83% said maintaining or improving their credit score is a priority, though nearly one in four reported missing or making less than the minimum payment on a loan or credit card over the past year due to inflation and affordability challenges.
More Than $1 Trillion in Debt
An estimated 111 million Americans carry credit card balances month to month, totaling more than $1 trillion in debt, according to an analysis cited in the report.
Student loan delinquencies have had the most significant impact on credit scores, with about 7.1 million borrowers seeing new delinquencies reported, leading to an average drop of 62 points since January 2025. However, FICO said delinquency rates have begun to stabilize after an initial spike when reporting resumed.
A Warning for Lenders
Mortgage delinquencies are also rising toward pre-pandemic levels, though they have been partially offset by home price appreciation in recent years. As housing markets cool, FICO warned lenders to remain vigilant.
The report also highlighted persistent gaps in consumer understanding of credit, noting that many Americans incorrectly believe income directly affects credit scores, a misconception that could hinder efforts to improve financial standing.
