Deep Dive into Distribution of the FICO® Score Across the US

Recent increase in the average FICO® Score is reflective, in part, of impacts that the pandemic has had on U.S. consumers’ credit behavior, credit report, and credit history.

As of April 2021, the average FICO® Score in the United States sits at 716, an increase of eight points compared to April 2020, which is around the time the economic shutdown driven by the COVID-19 pandemic began in earnest. While the pandemic resulted in economic hardship for many people, it also changed the credit behavior and average credit score of millions of consumers and led to the deployment of payment accommodations offered by lenders to help impacted, creditworthiness customers with their debts. 

This trend of an increase in the average FICO® Score at the national level is also evident at a state and city view. In fact, all 50 states, including the District of Columbia, and the 33 metropolitan areas (MSA) we evaluated showed an increase in their FICO® Score between April 2020 and April 2021. This recent increase in the average credit score is reflective, in part, of impacts that the coronavirus pandemic has had on U.S. consumers’ credit behavior, credit report, and credit history as observed in the underlying credit score data.

Changes in Consumer Behavior Drive Average Score Changes

Examples of changes in aggregate consumer credit behaviors and credit history as of April 2020 versus April 2021 include a 5% reduction in consumers with one or more recent delinquencies reported on file, a lower percentage of consumers who have higher credit utilization on their credit cards and a greater than 10% decrease in the average credit card balance and utilization of the U.S. consumer.  

As credit card payment history and amounts owed categories account for ~65% of a FICO® Score, these changes toward less risky behaviors have contributed to the migration of higher average FICO® Scores.

In addition, during the pandemic people sought out less credit, on average, as compared to the April 2020 benchmark snapshot. The percentage of population seeking new credit or credit cards was about two percentage points lower compared to April 2020 and we also observed fewer new credit obligations were opened over the previous 12 months as of April 2021 — influencing the credit score categories of length of credit history and pursuit of new credit.

And the uptick in average FICO® Score isn’t just coming from the prime, lower risk, segments with good credit scores. The upward trend in average FICO® Score is actually most pronounced in the lower score ranges. For example:

  • For those people who had a FICO® Score between 550 and 599 as of January 2020 (pre-pandemic), their average credit score has gone up from 581 as of April 2020 to 601 as of April 2021.
  • For those people who had a FICO® Score between 750 and 799 as of January 2020 have seen virtually no movement in their average credit score between April 2020 and April 2021.

Having higher average FICO® Scores provides benefits beyond “bragging rights.” A good credit score can help individuals gain access to more credit options at more affordable interest rates — potentially saving them thousands of dollars in interest charges.

So, while the national average FICO® Score is increasing over time, what about credit scores at the state or city level? Review FICO’s “2021 Credit Trends in the U.S. by City and State” report to find out:

  • Which states have experienced the biggest year-over-year average credit report and average score increase?
  • How do U.S. cities compare on key credit score metrics and credit history?
  • Which major city residents are applying for credit most frequently?

Discover More About FICO® Score Trends

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