Credit Scores Remain at All-Time Highs, but That Could Change as COVID-Era Stimulus Programs End

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A new analysis from FICO found that the average credit score in the United States remains at an all-time high in 2022, despite the fact that soaring inflation has pushed many Americans to rely more heavily on their credit cards to afford the high prices.

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The national average FICO score currently sits at 716 — the same as a year ago, FICO said in an Aug. 30 press release. FICO (for Fair Isaac Corporation) scores range from 300 to 850, and anything above 700 is considered a good score.

The fact that the average score remained stagnant between 2021 and 2022 could be a sign that the uptick in credit scores during the COVID-19 pandemic is leveling off, FICO noted — and that average might go down again in the future.

As previously reported by GOBankingRates, average credit scores in the U.S. moved higher during much of the pandemic thanks mainly to a decline in credit card utilization rates. These rates measure the percentage of the amount of credit you owe vs. your total credit limit across all cards and loans. They are considered a key part of overall credit scores.

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One reason credit utilization rates declined during the pandemic was because there were less things to spend money on with so many stores and restaurants closed, and travel brought to a standstill. Another factor was that many Americans used federal stimulus checks to pay down debt, while millions of student loan borrowers got additional relief from a years-long pause in federal student loan payments.

Those federal stimulus checks are now a thing of the past, however. And the federal student loan pause, which was extended again last week by the Biden administration, is set to end on Dec. 31 — and there’s every indication that the latest extension will be the final one.

These two developments — an end to stimulus checks and the probable end of the student loan payment pause — could lead to lower average credit scores the next time FICO conducts an analysis.

In fact, there are already signs that some key credit metrics are weakening, FICO noted, including a “small uptick in missed payments, slightly elevated consumer debt levels, and an increased rate in consumers obtaining new credit.”

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Meanwhile, CNBC reported that as of April, the average credit card utilization was just over 31%, up from 29.6% a year earlier.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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