Credit Scores Are Declining Across the U.S. – What You Need to Know

In recent months, Americans have been facing a new kind of financial pressure: declining credit scores. After years of relative stability and post-pandemic recovery, the average credit score across the U.S. is starting to drop—and that trend is raising red flags for consumers, lenders, and economists alike.

While a few points might not seem like a big deal, a lower credit score can impact everything from loan approvals to insurance rates, and even job opportunities. So what’s causing this downturn? And more importantly, what can you do to protect your credit during uncertain times?

In this post, we break down the reasons behind the nationwide credit score dip, what it means for your financial future, and the practical steps you can take to stay ahead.

Why Are Credit Scores Dropping?

Several factors are contributing to the nationwide drop in credit scores:

1. Rising Debt Levels

Americans are taking on more debt, especially on credit cards and buy now, pay later services. As balances grow and people struggle to pay them off, credit utilization increases—a major factor that lowers credit scores.

2. Higher Interest Rates

With interest rates still high, monthly payments on credit cards, auto loans, and mortgages are more expensive. This makes it harder for many to keep up with payments, leading to missed or late payments that hurt credit scores.

3. End of Pandemic-Era Relief

Many financial relief programs from the pandemic—like student loan pauses and expanded unemployment benefits—have ended. Without that cushion, more people are falling behind on their bills.

4. Inflation Pressure

Even with cooling inflation, the cost of living is still high. Groceries, rent, and utility bills continue to stretch household budgets, leaving less money to pay down debts.

What’s the Average Credit Score Now?

As of mid-2025, the average FICO score in the U.S. has dropped from 717 to around 710, according to industry reports. While this might not seem dramatic, even a small drop can impact your chances of getting approved for loans—or determine what interest rate you’re offered.

What You Can Do to Protect or Improve Your Score

The good news? You can take steps today to protect your credit score or start rebuilding it:

1. Pay On Time

Set reminders or automate payments. Payment history makes up 35% of your score.

2. Keep Balances Low

Try to keep your credit card utilization below 30%—or even lower, if possible.

3. Avoid Opening Too Many Accounts

Too many credit applications in a short time can lower your score.

4. Check Your Credit Report

You’re entitled to a free credit report every week at AnnualCreditReport.com. Check for errors or fraudulent activity.

5. Use Tools and Alerts

Many banks and credit card companies offer free credit monitoring, alerts, and budgeting tools. Use them to stay on top of your finances.

The decline in credit scores is a warning sign of financial stress across the country—but it’s also a reminder to check in with your own credit health.

Even in tough times, small steps can make a big difference. Managing debt, paying on time, and staying informed can help you weather the storm and come out stronger.