Student Loan Delinquencies Pushed Down the Average U.S. Credit Score

The national average FICO score fell in February, operated by federal student loan delay, which began to affect the credit report for the first time in five years.

The average US FICO credit score was 715 in February, one digit less than last month and two points less than April 2024. Tommy Lee, Senior Director of FICO’s analytics and score, wrote that many drops can be held responsible for student loans.

During the Covid-19 epidemic, the federal government did not require payment on federal student loan payment until October 2024. Once the payment was resumed, those who missed the payment were not able to see a hit for their credit till February due to the government’s on-ramp period.

An initial estimate by the Federal Reserve Bank of New York expected 9.7 million borrowers to see their credit rating by looking at their credit rating drop. According to FICO, only 2.7 million borrowers had informed their criminal student loans to the Credit Bureau by February.

However, in the next few months, more student loan luxury will be reported. Although his delay has not been reported yet, Fico said that about 5.4 million has not paid student loans since the stoppage was over.

For the first time after the epidemic begins, the delynasty rates on all loans are now above 8.1% pre-mahamari benchmark in January 2020. In February, the percentage of consumers decreasing over 90 days in the last six months had increased by 7.4% to 8.3% month ago. According to FICO, that growth was also credited for reporting student loan delay.

Additionally, on the average FICO score, the hit of the student loan hit may be reduced due to the balance of low credit card. Average credit card use, percentage of a borrower’s total percentage of credits, decreased from January to February. As consumers eventually paid their holiday expenses, the remaining amount declined, the average FICO score improved and some of the declines caused by the missing student loan payments.