The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBC

The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBC

The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBC

Hey there, high school and college students! Let’s talk about something that might not be on your radar yet but is super important for your financial future: credit scores. Recently, there’s been a bit of a shake-up in the world of credit scores, and it’s worth paying attention to.

For the first time since 2013, the average FICO score in the U.S. has dropped slightly, from a record high of 718 in April 2023 to 717 in October 2023. FICO scores range from 300 to 850 and are a big deal because they’re used in 90% of lending decisions. A score of 717 still falls into the “good” category, which is great news, but why the drop? Experts point to high-interest rates and persistent inflation leading to more missed payments and increased debt levels.

Now, if you’re thinking, “What if my credit score isn’t so high?” don’t worry! There are credit cards designed for people with lower scores. For instance, the Discover it® Secured Credit Card is great for building credit, and it even offers cash back rewards. Plus, after seven months, you might qualify for an unsecured line of credit. Another option for those with fair credit is the Capital One QuicksilverOne Cash Rewards Credit Card, which offers 1.5% cash back on purchases.

Improving your credit score is doable. Paying bills on time is key since payment history is a major factor in your FICO score. You can also boost your score with tools like Experian Boost™, which adds on-time utility and subscription payments to your credit report. And always keep an eye out for errors on your credit report – they can drag your score down unfairly………..full-loaf-600x400-1-e1700879832480 The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBC[read more]

Rising Dough

Rising-Dough-e1700879911412 The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBCIn the dynamic world of personal finance, understanding credit scores is crucial. How might the recent changes in average credit scores impact consumer behavior, especially among young adults just starting to build their credit history? Consider how this shift could influence their decisions in managing debt, applying for loans, and using credit cards.

*Click on the “Full Loaf” icon to read the full article! After you read the full article, let us know your thoughts.

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8 Comments
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2a102943de8f29107fcce2bdc160db20?s=64&d=mm&r=g The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBC
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Andrew Arntzen
1 month ago

The recent changes in the average credit score will have a large impact on consumer behavior. The reason for this is that the score being lower will mean that people cannot afford the higher quality loans that they could have received when the score was higher. The shift will change decisions in managing debt, applying for loans, and using credit cards by having people borrow less money because they cannot afford it. The flow of money from loans being slowed down could lead to the transfer of money being decreased because people will not be able to take out as much money due to them not being able to afford it.

fdfbd7efdf4413e61812af22909984f3?s=64&d=mm&r=g The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBC
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Miari.R
1 month ago
Reply to  Andrew Arntzen

I completely agree with this answer. In addition to this, banks and businesses that offer loans will start to see a decline in customers who take out loans of large sums and length of monthly installments to be paid back will also decrease. Banks earn interest on the securities they hold and without them profits won’t be as high as they once were.

8ca56736e623e594656b2f1a18e6efd0?s=64&d=mm&r=g The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBC
Guest
Bush
1 month ago

Absolutely, the changes in average credit scores can have a big impact on consumer behavior. For young adults, a higher average score might make it easier to get loans at better rates, which could encourage them to take on more debt or use credit cards more confidently. On the flip side, if scores trend lower, they might be more cautious and focus on building their credit through responsible use, like paying bills on time and keeping balances low. This shift can also influence their approach to managing existing debt and could lead to a preference for credit products that help build credit history without high costs.

6f7dcd2222df8c327c3ce4c9709654fb?s=64&d=mm&r=g The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBC
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Cindy
1 month ago

Young adults might become more cautious with their credit card use and debt management. They might also shop around more for loans to ensure they’re getting terms that reflect their creditworthiness.

d35a3b5b7c10f29756b6b1434ad5ab3f?s=64&d=mm&r=g The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBC
Guest
Alyssa
1 month ago

The recent increase in average credit scores could encourage young adults to pursue more favorable loan terms, take on manageable debt, and use credit cards responsibly, thereby fostering financial responsibility and enabling them to access better financial opportunities earlier in life.

31ff78fff31d62f867386748ea3bd048?s=64&d=mm&r=g The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBC
Guest
Liliana
1 month ago

The changes in average credit scores can have a big impact on consumer behavior. A higher average score might make it easier to get loans at better rates, which could encourage them to take on more debt or use credit cards more confidently. On the flip side, if scores trend lower, they might be more cautious and focus on building their credit through responsible use, like paying bills on time and keeping balances low. This shift can also influence their approach to managing existing debt and could lead to a preference for credit products that help build credit history without high costs.

b99cd965dd5d88a0a60ff19cf240c73c?s=64&d=mm&r=g The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBC
Guest
Alex
1 month ago

Young adults will likely not be as impulsive as they realize the consequences of asking for loans that they can’t pay back, they will make smarter decisions and not ruin their credit as when that happens it’s quite difficult for them to build it back up.

70366847f9a1e1f09218e7ad27ed3752?s=64&d=mm&r=g The average credit score has dropped for the first time in a decade — how does yours stack up? | CNBC
Guest
Katherine
1 month ago

The changes in credit scores could be very drastic because considering whenever you apply for some type of credit anywhere people usually look at your score. If someone has an excellent credit score it being lowered can potentially ruin a lot of things a person may have lined up.

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stonestreetcoffee.com ☕️ **Discover Stone Street Coffee Company - Your Coffee Haven!** Today's Dough readers, if you're on the hunt for exceptional coffee and cold brew, look no further than Stone Street Coffee Company. We at Today's Dough are smitten with their rich coffee blends and refreshing Cold Brew. Stone Street's commitment to quality shines through in every sip. Now, exclusively for our readers, click the banner above to snag a $5 off coupon on your next order. Experience the finest, ethically sourced beans roasted to perfection. Join the Stone Street community, savor top-notch coffee, and elevate your daily brew. ☕️🌟

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8 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Andrew Arntzen
Guest
Andrew Arntzen
1 month ago

The recent changes in the average credit score will have a large impact on consumer behavior. The reason for this is that the score being lower will mean that people cannot afford the higher quality loans that they could have received when the score was higher. The shift will change decisions in managing debt, applying for loans, and using credit cards by having people borrow less money because they cannot afford it. The flow of money from loans being slowed down could lead to the transfer of money being decreased because people will not be able to take out as much money due to them not being able to afford it.

Miari.R
Guest
Miari.R
1 month ago
Reply to  Andrew Arntzen

I completely agree with this answer. In addition to this, banks and businesses that offer loans will start to see a decline in customers who take out loans of large sums and length of monthly installments to be paid back will also decrease. Banks earn interest on the securities they hold and without them profits won’t be as high as they once were.

Bush
Guest
Bush
1 month ago

Absolutely, the changes in average credit scores can have a big impact on consumer behavior. For young adults, a higher average score might make it easier to get loans at better rates, which could encourage them to take on more debt or use credit cards more confidently. On the flip side, if scores trend lower, they might be more cautious and focus on building their credit through responsible use, like paying bills on time and keeping balances low. This shift can also influence their approach to managing existing debt and could lead to a preference for credit products that help build credit history without high costs.

Cindy
Guest
Cindy
1 month ago

Young adults might become more cautious with their credit card use and debt management. They might also shop around more for loans to ensure they’re getting terms that reflect their creditworthiness.

Alyssa
Guest
Alyssa
1 month ago

The recent increase in average credit scores could encourage young adults to pursue more favorable loan terms, take on manageable debt, and use credit cards responsibly, thereby fostering financial responsibility and enabling them to access better financial opportunities earlier in life.

Liliana
Guest
Liliana
1 month ago

The changes in average credit scores can have a big impact on consumer behavior. A higher average score might make it easier to get loans at better rates, which could encourage them to take on more debt or use credit cards more confidently. On the flip side, if scores trend lower, they might be more cautious and focus on building their credit through responsible use, like paying bills on time and keeping balances low. This shift can also influence their approach to managing existing debt and could lead to a preference for credit products that help build credit history without high costs.

Alex
Guest
Alex
1 month ago

Young adults will likely not be as impulsive as they realize the consequences of asking for loans that they can’t pay back, they will make smarter decisions and not ruin their credit as when that happens it’s quite difficult for them to build it back up.

Katherine
Guest
Katherine
1 month ago

The changes in credit scores could be very drastic because considering whenever you apply for some type of credit anywhere people usually look at your score. If someone has an excellent credit score it being lowered can potentially ruin a lot of things a person may have lined up.

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