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The average FICO credit score hit new record highs during the pandemic—here’s why

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The average FICO credit score hit another record high of 711 in the U.S. in July — several months into the global coronavirus pandemic, according to the latest research from the popular scoring company. 

It may sound crazy that FICO scores actually went up at a time when tens of millions of Americans were unemployed and struggling to pay bills and loans. But when looked at in aggregate, FICO scores don't shift rapidly, says Ethan Dornhelm, who leads the research and analytic development of FICO scores globally. 

"The FICO score shouldn't be thought of as a leading indicator or as a predictor of where the economy is headed," Dornhelm tells CNBC Make It. In fact, there's typically a "bit of a lag" between when a major macroeconomic event occurs, such as a recession, and when the average FICO score is going to reflect that, he says.

During the Great Recession, the average U.S. FICO score didn't hit its lowest point until late 2009, over a year after the dramatic collapse of Lehman Brothers in September 2008 and nearly two years after economists ruled that a recession had actually started. 


Beyond the typical lag that's expected in the scoring data, the relief actions federal lawmakers and lenders took early in the pandemic may have also helped mitigate or delay lower credit scores, Dornhelm says.

"The degree of coordinated government intervention and stimulus spending is different this time around relative to prior crises," Dornhelm says, adding that the stimulus payments in the CARES Act, the forbearance programs and the enhanced unemployment benefits have helped borrowers stay financially afloat. 

As of July, the number of consumers who had missed payments reported on their credit file was actually down significantly, Dornhelm says. Just 7.3% of borrowers had a missed payment that was more than 90 days overdue in the past six months, compared to 8.1% of Americans in January. 

This has a major impact on credit scores at large, since staying current with your payments represents about 35% of the overall FICO score calculation, Dornhelm says. It's worth noting that forbearance and deferment agreements do not cause a FICO score to drop.

Since the pandemic started, consumer debt levels have dropped as well. The average credit card balance was just $6,004 in July, down from an average of $6,934 back in January. Again, that makes an impact since credit utilization — the ratio of money you have on your credit cards to the total amount of credit you have available — is a key component of the "amounts owed" category which accounts for about 30% of the FICO Score.  

Yet because of the ongoing uncertainty of the health effects of Covid-19 and whether there will be additional stimulus legislation, it's very challenging to predict where the FICO score might be heading, Dornhelm says. "There's still no clarity around what the shape of this downturn and what the recovery is going to look like," he says. 

There are a lot of unanswered questions around when the U.S. economy is really going to start opening up again or when the jobs market will recover. The timing and scope of those recovery steps will play a huge role in how credit scores react, Dornhelm says. 

That's especially true since the first round of government stimulus and the enhanced unemployment benefits have all ramped down now. "Consumers are making do with whatever the state unemployment benefit level is," Dornhelm says.

A huge question is, will Congress reach some sort of consensus on another stimulus package? And if so, what will be the effect of that stimulus package in helping consumers continue to bridge the gap that may have opened up in their finances? 

Here's the complete breakdown of how the average U.S. FICO credit score has shifted in the last 15 years.

Average FICO credit score

Date Average U.S. FICO score
Oct. 2005688
Oct. 2006690
Oct. 2007689
April 2008690
Oct. 2008689
April 2009687
Oct. 2009686
April 2010687
Oct. 2010687
April 2011688
Oct. 2011689
April 2012690
Oct. 2012689
April 2013691
Oct. 2013690
April 2014692
Oct. 2014694
April 2015695
Oct. 2015696
April 2016699
Oct. 2016699
April 2017700
Oct. 2017701
April 2018704
Oct. 2018705
April 2019706
July 2019706
Oct. 2019706
April 2020708
July 2020711

Source: FICO

Source: FICO

To hear from top experts in personal finance and get critical advice on spending and saving to stay financially afloat, join the CNBC Path Forward: Your Money Summit on November 17, featuring Suze Orman, Patriots linebacker Brandon Copeland, The Budgetnista founder Tiffany Aliche and more.

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