The typical American household needs an extra $11,434 a year to maintain the same standard of living it did in 2021. And nearly half of those with revolving credit card debt say spending on necessities contributed to their balance, according to an annual report from NerdWallet.
Now, for the first time in a decade, consumer credit scores are taking a hit. The national average FICO score was 717 as of October, down from 718 in July, per FICO, a data analytics company that focuses on credit scoring services.
Related: ‘Is This a Sign of Trouble Ahead?’: Gen Z Is Missing Credit Card Payments, Running Up Debt
The last time scores fell was between April and October 2013, when they dropped from 691 to 690, according to FICO’s report, which cites increasing missed payments and mounting consumer debt as contributing factors.
“The apparent cumulative impact of higher interest rates, elevated consumer prices, and economic uncertainty has put a financial strain especially on those consumers who heavily rely on credit cards to cover everyday expenses,” FICO senior director of scores and predictive analytics Can Arkali wrote in the report.
Related: I Went From Substantial Credit Card Debt to Millionaire Status. Here’s How I Did It.
If an average consumer credit score of 717 seems high, it’s variable across generations; length of payment history is one important scoring factor.
As of the second quarter of 2023, Gen Z (18 to 26) had an average credit score of 680, millennials (27 to 42) of 690, Gen X (43 to 58) of 709, baby boomers (59 to 77) of 745 and the silent generation (78 and older) of 761, according to Experian data reported by CNBC Make It.