Rising Credit Card Utilization Drops Average Credit Score in First-Ever FICO Credit Insights Report

Increased credit card usage is nudging the national average FICO score down to 715, two points below 2024, according to the analytics company’s inaugural FICO Score Credit Insights report.

The findings offer credit card issuers a clearer view of how Americans are using credit products, helping them refine underwriting strategies amid a shifting borrowing landscape.

“We created the FICO Score Credit Insights report to help the industry uncover the most impactful trends influencing consumer credit behavior,” said Julie May, Vice President and General Manager of B2B Scores with FICO, in a press release.  

The company has packed the first edition of the report with findings that many issuers may find useful. One such discovery is that missed payments, in addition to credit card utilization rates, have caused the average credit score to decrease in 2025.

The average FICO score dipped to 715 earlier this year, partly due to the resumption of reporting on student loan delinquencies, which has contributed to a rise in missed payments.

Credit card issuers who recognize how broader economic factors affect consumers can better understand why cardholders may be missing payments more often.

This understanding also gives issuers an opportunity to engage proactively with customers who are struggling to stay on top of their payments.

Issuers can offer educational programs and budgeting tools to help cardholders manage credit responsibly and plan their finances.

Consumers who struggle with credit routines are often eager for guidance, and efforts to boost financial literacy can pay off with more satisfied customers — and stronger long-term returns for issuers. 

The new FICO report indicates that, compared with other age groups, Gen Z has had the biggest drop in their average FICO score over the last year. More members of Gen Z than other generations have also recently seen their scores fluctuate by greater than 50 points, an outcome that FICO attributes in part to student loan debt.

Members of Generation Z, born between 1997 and 2012, represent an important group of consumers to many businesses, including credit card companies. The oldest members of Gen Z are now approaching 30 years of age, and they may soon have more expenses to manage as they progress through adulthood.

A credit card issuer that gains a member of Gen Z as a customer now may be that cardholder’s issuer of choice throughout their entire life. That’s why issuers that tailor their marketing strategies to Gen Z could attract new customers from this cohort — but timing is critical.

According to FICO, nearly two-thirds of Gen Z members have used credit cards or other lending solutions more often in the past year to manage their finances. But their payment behaviors can shift quickly.

Issuers will need to contend with buy now, pay later (BNPL) products for a bigger share of Gen Z’s spend. A recent study shows that members of Gen Z lead the way when it comes to adopting buy now, pay later tools, with 59% of the cohort currently using BNPL options. And more Gen Z individuals have plans to use BNPL solutions soon, according to the study.

Generation Z’s use of BNPL products outpaces that of consumers in other age brackets.

FICO’s report also highlights a shift in consumers’ credit score distribution. The share of people with scores between 600 and 749 fell from 38.1% in 2021 to 33.8% in 2025, suggesting that issuers may need to move away from broad card growth strategies and adopt more targeted approaches to attract new customers.

With competition intensifying in the payments space, the FICO Score Credit Insights report offers issuers a tool to evaluate whether they should adjust their plans for expanding card portfolios.

“We hope this proves to be a powerful tool for lenders, policymakers, and advocates working to support financial resilience and inclusion,” May said.