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The average U.S. FICO score is up 8 points from last year — here's how people increased their scores

A new report from FICO shows that the average American FICO score increased by eight points.

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Your credit score is one of the most important indicators of your financial health, especially in the eyes of lenders who have the ability to extend you credit for some of the biggest purchases of your life — like a mortgage for a home or a loan for a car.

And while you may have several different credit scores because there are many different scoring models, the FICO score is the most important one because it gets used in 90% of lending decisions. Therefore, it's important to make sure you're taking steps to keep your FICO score in a healthy range, which is usually considered to be 670 and above.

The good news is, the average FICO score in the U.S. actually increased eight points to 716 in the past year, according to a recent report from FICO. This seems like a promising indicator that more Americans are improving their chances of qualifying for the best loan rates, the best credit cards and more favorable terms for their mortgages.

But, if you feel like you'll need to take some additional steps to get your FICO score into a better place, read on for Select's breakdown of three important steps people took to increase their score.

They made more on-time payments

Missed payments have actually decreased significantly. According to the report from FICO, as of April 2021 just 15% of Americans have had a missing payment that was more than 30 days past its due date. The year before, however, 19.6% of Americans had missed a payment.

Payment history accounts for 35% of your FICO score — and it's actually the largest factor when calculating a score. Lenders want to make sure that you have a track record for consistently making on-time payments because it's a clue for how likely you are to pay them back when they extend you new lines of credit. This is why missing a payment can actually lower your credit score.

Of course, sometimes missed payments happen unintentionally — especially when life happens or you're so busy that you forget to mail a check or pay the bill online. Setting up autopay can put your mind at ease when it comes to paying your bills (read about what happens when you miss a credit card payment here).

You can schedule a fixed sum of money (or the statement balance in the case of a credit card) to be paid toward your debts on the same day each month so you never have to lift a finger to manually pay them. And some lenders may actually offer you a slightly lower interest rate on your loan if you use autopay since it decreases the likelihood that you'll miss a payment due date.

Some apps, like Mint, also send you reminders when you have an upcoming payment that's due. And you can even mark the bill as "paid" in the app so you never have to wonder if you actually took care of it for the month.


Information about Mint has been collected independently by Select and has not been reviewed or provided by Mint prior to publication.
  • Cost


  • Standout features

    Shows income, expenses, savings goals, credit score, investments, net worth

  • Categorizes your expenses

    Yes, but users can modify

  • Links to accounts

    Yes, bank and credit cards

  • Availability

    Offered in both the App Store (for iOS) and on Google Play (for Android)

  • Security features

    Verisign scanning, multi-factor authentication and Touch ID mobile access

Terms apply.

They decreased the amount of debt they carry

Although millions of people experienced a partial or total loss of income as a result of the pandemic, stimulus bills and enhanced unemployment benefits under the CARES Act helped people prioritize paying down debt and saving. And in some cases, people who experienced minimal or no interruption in income during the pandemic were able to save more and make higher payments toward credit cards and loans in order to pay down their debt faster. Also, just having fewer discretionary spending options like concerts, eating out, nightlife and more meant that consumers could put their extra cash toward paying down debt.

While having debt isn't inherently "bad," it's still important to be aware of how much debt you carry in relation to the amount of credit you have available. This credit utilization rate makes up 30% of your FICO score. Having $5,000 in credit card debt doesn't sound like a lot of debt if your credit limit is $20,000 (in this case, your utilization is just 25%). But if you have $5,000 in credit card debt and a credit limit of $10,000, suddenly your utilization jumps to 50% because you have a lower amount of available credit.

Interest charges can make paying down credit card debt harder, especially when you consider the fact that the average interest rate for credit cards ranges from 15.56% to 22.87%. In some cases, you might be able to put more of your payment toward the principal amount by using a balance transfer credit card. Ones like the Wings Visa Platinum Card have no balance transfer fee and carry an interest rate as low as 8.15%.

The Citi® Double Cash Card, on the other hand, lets you make a balance transfer without paying interest on the amount transferred for the first 18 months (after, 16.24% - 26.24% variable), which can potentially save you significant cash. Balance transfers must be completed within 4 months of account opening. While this offer doesn't apply to new purchases made with the card, having the interest-free period can help you pay off that existing balance quicker.

Citi® Double Cash Card

On Citi's secure site
  • Rewards

    2% cash back: 1% on all eligible purchases and an additional 1% after you pay your credit card bill

  • Welcome bonus

    For a limited time, earn $200 cash back after spending $1,500 on purchases in the first 6 months of account opening.

  • Annual fee


  • Intro APR

    0% for the first 18 months on balance transfers; N/A for purchases

  • Regular APR

    16.24% - 26.24% variable

  • Balance transfer fee

    For balance transfers completed within 4 months of account opening, an intro balance transfer fee of 3% of each transfer ($5 minimum) applies; after that, a balance transfer fee of 5% of each transfer ($5 minimum) applies

  • Foreign transaction fee


  • Credit needed


Terms apply.

They decreased how often they actively sought out new credit

Lastly, fewer Americans have been applying for new lines of credit. In fact, the average number of hard credit inquiries on a person's credit file has decreased year-over-year by about 12.1%, according to FICO.

When you apply for a new line of credit, your score temporarily decreases because a hard inquiry is being used by the lender to evaluate your credit worthiness. At the same time, however, your credit mix accounts for 10% of your FICO score so the more diverse the mix, the better. This shows lenders that you're capable of managing various types of credit.

Checking your score before you apply for a new line of credit can help you figure out how likely you are to get more favorable terms (like a lower interest rate) ahead of time. This way, you can decide whether or not you want to hold off on a new loan or credit card and take some extra time to improve your score.

Services like Experian actually let you monitor your credit score for free. In fact, Experian reports your score based on the FICO 8 scoring model, so you'll be seeing the score that lenders are most likely to see when making a decision. You can even use the platform's free credit monitoring service so you can catch instances of possible identity fraud which can potentially hurt your credit score if someone applies for loans and credit under your name.

Experian Dark Web Scan + Credit Monitoring

On Experian's secure site
  • Cost


  • Credit bureaus monitored


  • Credit scoring model used


  • Dark web scan

    Yes, one-time only

  • Identity insurance


Terms apply.

So while you should always carefully consider when to apply for a credit card, mortgage, personal loan or car loan, keep in mind that using your credit mindfully and responsibly can help you maintain a healthy score.

Temporary FICO score dips can always be remedied by making on-time payments and keeping your utilization rate low. But if you want to learn more about how to improve your credit score, check out our post on other factors that influence your score.

Bottom line

Your credit score isn't a permanent report card grade that stays with you forever. You can improve your score over time with healthy financial habits, like making consistent, on-time payments and making sure you carry less debt.

It's especially important to work toward improving your FICO score since it's the score that's used in 90% of lending decisions. But on average, it seems that U.S. consumers are making financial improvements that are impacting their FICO scores in a healthy way.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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