Tag Archives: Score Distributions

Risk & Compliance US Average FICO Score Hits 700: A Milestone for Consumers

Jul102017

FICO regularly tracks the national FICO Score distribution as an important gauge of US consumer credit behavior. When I last blogged about this topic based on data from April 2016, the key takeaway was “the beat goes on.” US consumers continued to show improvement in managing their debts, which began shortly after the bottoming out of the economy in 2009-2010. We have pulled the latest FICO Score distribution information based on a snapshot of millions of US consumers’ credit data as of April 2017, and can report that consumer credit health and responsibility continue to be strong! For the first time since we’ve been tracking these stats, the average national FICO Score reached the 700 threshold — some 10 points above what it was just prior to the recession in October 2006. Let’s dig a little deeper by examining the score distribution over the past 10+ years. The movement in... [Read More]

5 Comments

Risk & Compliance US Credit Quality Rising … The Beat Goes On

Sep132016

When I last blogged about the national distribution of FICO® Scores a year ago, US consumer credit quality was continuing to climb upwards, though with some potential indications of change ahead. At the end of that post, I asked: has the 7+ year upward trend started to level off? 12 months later, the answer is a resounding “no”! The number of consumers scoring in the super-prime range of 800 or above has continued to grow. In October 2015, this figure surpassed 20% of the national population for the first time since we’ve been tracking this metric, dating back to pre-recessionary 2005. In the subsequent six months, the figure continued to climb, reaching 20.4% as of April 2016. Inversely, we see fewer consumers scoring in the lowest score ranges. As of April 2016, just 20.7% of the population score 600 or below. This figure peaked shortly after the Great Recession, at... [Read More]

Leave a comment

Risk & Compliance US Credit Quality Continues To Climb – But Will It Level Off?

Aug182015

According to the latest national distribution of FICO® Scores, US consumer credit quality has continued the slow-and-steady climb we’ve seen over the last few years. As we’ve observed for several years now, more consumers are scoring 800 or above—19.9% vs. 19.6% just six months earlier. And fewer consumers are scoring below 550. In fact, there’s been a clear pattern of decline in this segment since the low point of the economy in late 2009/early 2010. Some of this trend may be a result of the lowest-scoring consumers “dropping out” from traditional credit usage, and by extension no longer having valid FICO® Scores. Still, this decline is encouraging. It indicates that overall more consumers using credit are managing it responsibly enough to not be among the lowest scorers. In addition, the national average FICO® Score is currently at an all-time high since we’ve been tracking this metric, dating back to pre-recessionary... [Read More]

23 Comments

Risk & Compliance Research: Millennials Still Seek “Old School” Credit

Jun032015

In a previous blog post, we noted that some millennials are forgoing credit in favor of debit and other non-credit products. However, our most recent research reveals that credit is still vitally important for millennials, and they make up one-fourth of the credit population. Furthermore, millennials are looking for and opening new credit more than other age groups, as the chart below shows. Clearly, in spite of observed deleveraging, millennials remain the most likely age group to have credit inquiries. We also found that millennials are most likely to open new credit cards and student loans. Not surprisingly, it’s the 35-49 year olds who are most likely to open a new auto loan or mortgage. As one would expect, consumers typically open credit cards and student loans earlier in life, while taking on mortgages later on when they’re more willing and able to take on larger forms of debt. On... [Read More]

Leave a comment

Risk & Compliance Does the FICO® Score Work in Both Good Times and Bad?

Dec112014

As I engage clients about the recently released FICO® Score 9, one of the questions that comes up frequently is how effective will the score be if it is used in a more turbulent economic period.  The FICO® Score 9 development sample was based on an October 2011 to October 2013 timeframe.  For many lenders, this represents an extremely clean vintage as losses were extremely low.  They wondered how a score developed on data that was so pristine would hold up under a more unsettled time period. Over the last 25 years, there is an extraordinary body of work that demonstrates that the FICO® Score performs well in both good economic times and bad.  Since the first FICO® Score was released in 1989, we’ve validated various versions of the score across many different points of the economic cycle and for a wide variety of industries (auto, bankcard, mortgage, etc.) for... [Read More]

Leave a comment

Risk & Compliance US Credit Quality Continues to Inch Forward

Feb032014

We recently crunched the data from the latest national distribution of FICO® Scores. Our findings reveal a continued slow but steady improvement in US consumer credit quality.   Though the median FICO® Score has remained 711 since 2011, there are positive signs in score movement in the most recent timeframe, from October 2012 to October 2013. Specifically, we continue to see that the number of consumers in the lowest score ranges is shrinking. In fact, it’s hit its lowest point since peaking in October 2009. In October 2013, 24.0% of consumers scored less than 600, down from 24.4% in October 2012. We’ve almost reached our pre-recession benchmark of 23.8% in October 2007. The score movement table below reinforces this general positive shift in credit health. The table shows how the scores of different pockets of consumers migrated between October 2012 and October 2013. In general, more consumers are moving to higher score intervals than to lower score intervals. Many consumers, however, remain in their current score band.    Many risk...

1 Comment

Risk & Compliance Top 13 of 2013: Our Blog Posts You Liked Best

Dec302013

  With 2013 coming to a close, let’s take a look back at our top 13 most popular posts published this year: FICO® Score Distribution Remains Mixed – Looking at the national distribution of FICO® Scores, Frederic Huynh noted that the profile of credit risk for US consumers, while still mixed, may be slowly returning to a prerecession pattern. New Map Identifies US Card Fraud Hotspots – John Buzzard examined FICO’s new interactive map showing debit and credit card fraud trends and hotspots in the US. The Young and the Cardless – Analyzing credit behavior across different age groups, Frederic Huynh exposed a new trend: more young consumers forgoing the use of credit cards. Infographic: Who’s Leading the Mobile Banking  Revolution?  – Daniel Melo argued that the answer is consumers, who are pushing for banks to do more with the mobile channel and rewarding banks that answer the call. Card Fraud Trends and Predictions  – Digging into recent card compromise data, John Buzzard analyzed the latest fraud trends and made...

Leave a comment

Risk & Compliance Russian Credit Delinquencies Are Rising – But Should Lenders Worry?

Aug142013

What are the latest figures showing the decline in Russian’s credit health really telling us? As shown in the data released today by FICO and the National Bureau of Credit Histories, Russia’s leading credit bureau, Russian borrowers’ credit repayment delinquencies rose again in July 2013. After a year and a half of rising delinquencies, the country’s FICO® Credit Health Index (a measure of the percentage of loans and credit cards delinquent by 60+ days) stands at 104 points, down from 115 in January 2012, to stand at the lowest level since January 2010. While the decline in the index is real, the pattern may not be what it seems, according to my colleague Evgeni Shtemanetyan, who directs FICO’s operations in Russia. He note, that lenders are granting more unsecured consumer loans and credit cards, which have higher delinquency rates. In fact, the delinquency levels on the types of loans that dominated lenders’ portfolios before — such as auto loans — are stable or decreasing. So the increase in delinquency doesn’t mean the patient is sick...

Leave a comment

Risk & Compliance FICO® Score Distribution Remains Mixed

Apr152013

Based on a fresh look at the national distribution of FICO® 8 Scores, it appears that the profile of credit risk for U.S. consumers, while still mixed, may be slowly returning to a prerecession pattern. As my colleague Andrew Jennings has noted, people with higher FICO® Scores have generally increased their revolving credit usage since 2010. This trend is echoed in score distributions nationally during 2012 as the number of people with scores between 750 and 850 dropped slightly—from 37.4% in 2010 to 37.2% in 2012. Higher balances and higher credit utilization could help explain this modest downward shift in scores. At the lowest end of the score range, the number of people with FICO® Scores below 500 remained very low in 2012 by historical standards. During 2012, there was a modest increase of roughly 600,000 people at that score range between April (the data sample used in our last score distribution post) and the October data shown above. This may be partly explained by an increase last year in mortgage foreclosure rates. In general, the number of...

2 Comments