Missed payments and high levels of inflation has led to lower credit scores for consumers.
For the first time in a decade, average credit scores have decreased slightly to 717, according to data released by FICO. In 2023, average scores sat at 718. This decline is likely due to high interest rates and inflation that are causing consumers to miss more payments and take on higher levels of debt. Since October, more than 18% of Americans have had past-due payments on one or more credit accounts. Compared to April 2023, this is up by 4%, FICO reported.
State governments are taking action to curb the effect medical debt has on credit scores. Recently, Governor Katie Hobbs of Arizona announced that the state would begin working with a nonprofit, RIP Medical Debt, to forgive medical debt across the state. Over one million Arizonans will reap the benefits of this debt forgiveness.
For those worried about their credit scores, there are numerous steps consumers can take to make sure their scores stay in the good range. A few of those steps include: Paying off high-interest debt is also a way to help your credit score. Visit Credible to consolidate your debt into a single, more manageable monthly payment.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
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