Credit scores are dropping nationwide, reflecting struggles Americans are having to stay afloat financially, according to FICO.

The national FICO score, or three-digit number used to summarize your credit report, fell two points to 715 from last year,the credit scoring services company said in its inaugural FICO Score Credit Insights report. The decline was driven by rising credit card utilization and a spike in missed payments, partly due to resumed student loan delinquency reporting, FICO said.

Many consumers had relied more heavily on credit cards to make ends meet, driving average credit card utilization in 2025 to 35.5%, up from 29.6% in 2021.

A drop in FICO scores can be concerning because lenders use them to decide whether to approve loans and credit cards, and to determine interest rates and credit limits. Scores range from 300 to 850, with a higher score indicating lower risk to lenders and a lower score suggesting a higher risk.

FICO’s new report also “shows how consumers are adapting – whether by prioritizing essential payments like auto loans, navigating the return of student loan obligations, or actively monitoring their credit health,” said Julie May, vice president and general manager of B2B Scores at FICO, in a statement.

Who is worst off?

Gen Z, or ages 18 to 29 years, saw the largest average FICO Score decrease of any age group, down three points year-over-year, FICO said.

They also experienced more 50-plus points swings in their FICO score than the national average, reflecting greater financial volatility, it said. Much of that volatility is likely due to student loan debt, FICO said. Thirty-four percent of younger consumers hold student loans, compared to just 17% of the total population.

Where’s the middle?

Many Americans also continue to exit the middle of the FICO score range (around 600–749), data showed. Middle FICO score holders fell to 33.8% of the population this year from 38.1% in 2021.

However, FICO noted that all these people didn’t drop to lower scores. Instead, consumers moved into both the highest and lowest score brackets, “reflecting a K-shaped recovery.”

A K-shaped recovery means economic improvement is uneven, with some people moving up while others continue to move down or struggle.

How are Americans coping?

Struggling Americans are reprioritizing and keeping a closer eye on their credit scores, FICO data showed. More than half (55%) of Americans checked their credit score at least once in the past year, up from 49% in 2024, it said.

Consumers are now 19% more likely to pay auto loans than mortgages, placing autos at the top of the payment hierarchy, it said. Mortgages are 56% more likely to be paid than personal loans, which are 64% more likely to be paid than bank cards.

Repaying student loans is everyone’s lowest priority. It ranks lowest “even among high-scoring borrowers,” FICO noted.

“This shift highlights how consumers are making strategic choices to protect essential assets and manage their financial obligations,” said Tommy Lee, senior director of Predictive Scores and Analytics at FICO.

Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and  subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.