Delinquent student loan payments have fueled a decline in credit scores, according to FICO, the data analytics firm whose scoring model is used in 90% of lending decisions.
In February 2025, the average FICO score was 715, compared to 716 in January 2025 and 717 in April 2024.
Payments and interest on federal student loans were paused at the start of the Covid-19 pandemic in March 2020. The moratorium was lifted in October 2023, followed by a one-year "on ramp" period, when missed, late or partial payments weren't reported to credit bureaus.
That grace period ended on September 30, 2024.
"Add in the fact that federal student loan delinquencies are not reported until they are 90 days past due and federal student loan delinquencies have only just started showing up in the credit report again as of February 2025," Tommy Lee, senior director of analytics and scores, wrote in a post on the FICO website.
More than 9 million borrowers are estimated to be late on their student loan payments. According to the Federal Reserve Bank of New York, some might see their scores fall by as much as 171 points.
FICO also pointed to elevated interest rates and a spike in the number of Americans who fell more than 90 days behind on payments as factors for the score drop.
What is a good credit score?
Introduced in 1989, the FICO credit score is a three-digit figure used by the majority of lenders to determine how likely you are to repay your debt in full and on time.
FICO scores range from 300 to 850 and anything between 670 and 739 is considered a "good" score. While 850 is a perfect score, the current U.S. average of 715 still falls into the good category and would get you approved for a conventional mortgage or car loan.
FICO score ranges
Excellent: 800 to 850
Very good: 740 to 799
Good: 670 to 739
Fair: 580 to 669
Poor: 300 to 579
While VantageScore is another credit score model used by some lenders, FICO is the industry standard. Scores are generated based on a variety of criteria:
Payment history (35%): How often did you make full, on-time payments? This is the largest percentage of your credit score.
Credit utilization (30%): What percentage of your total available credit are you tapping into right now?
Length of credit history (15%): How long you've been using credit.
New credit (10%): If you apply for and receive several credit cards, the proliferation of new lines of credit will lower your score.
Credit mix (10%): Lenders want to see various lines of credit across several (but not too many) accounts.
How to raise your credit score
Outstanding debt is the most common reason for a low credit score, so a regular series of on-time payments to a high-APR creditor, like a credit card, will make the biggest impression on your score.
You can also ask a credit card company to increase your credit limit. So long as you don't any spend more, your credit utilization ratio will drop.
If you're drowning in large debt, consider a debt consolidation loan or work with a debt relief company, which will negotiate with your creditors to lower the amount you owe.
Whether you have good or bad credit, reviewing your credit report can help you discover errors or fraud. If the three main credit bureaus agree with your findings and remove incorrect negative information, your score will go up.
How to check your credit score
Most credit card issuers provide free credit score access to their cardholders, but CreditWise from Capital One offers free VantageScores from TransUnion and you don't need to be a cardholder to utilize it
CreditWise® from Capital One
Cost
Free
Credit bureaus monitored
TransUnion® and Experian®
Credit scoring model used
FICO® Score 8
Dark web scan
Yes
Identity insurance
No.
Experian's free credit monitoring service shares your FICO score, but it doesn't include three-bureau credit monitoring.
Experian Dark Web Scan + Credit Monitoring
Cost
Free
Credit bureaus monitored
Experian
Credit scoring model used
FICO®
Dark web scan
Yes, one-time only
Identity insurance
No
Terms apply.
For both FICO and VantageScore scores from all three agencies, you'll need to enroll in a credit monitoring service or identity theft protection service, which usually also comes with dark web monitoring, password managers and VPN generators.
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You can also subscribe to a credit repair service, which will work to correct any mistakes or fraudulent items on your credit report, thereby raising your score.
Credit scores FAQS
What is the best credit score you can have?
FICO scores range from 300 to 850. It's extremely rare to have a perfect 850, but even if you did, it probably wouldn't qualify you for a better rate. In the mortgage space, for example, a FICO 720 score generally earns you the best rate. If you're shopping for a car loan, a 760 will open as many doors as an 850.
What is credit monitoring?
Credit monitoring is an aspect of identity theft protection that focuses on reviewing your credit score and credit history. Credit monitoring services regularly check your credit reports from one or more of the three major credit bureaus and alert you to changes or suspicious activity. CNBC Select has named Aura, LifeLock and IdentityForce among our top credit-monitoring services.
How often should I check my credit score?
- Check your FICO score several times a year. Even if you haven't taken on any debts, you can check for errors or fraud.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit monitoring article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit scores and credit products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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