Inflation, federal policy shifts and economic uncertainty are pushing consumers to change their financial habits, though not without consequences.

Generation Z saw the biggest decline in average credit scores across all age groups with a greater likelihood for swings of 50-plus points, according to the inaugural FICO Score Credit Insights report. FICO, an analytics software company, attributed the volatility among Gen Z to the resumption of student loan collections since President Donald Trump started his second term.

Gen Z is defined as those born starting in 1997, with no specific end point.

Overall, the national average credit score dropped two points from last year to 715, driven by consumers’ increased reliance on credit cards and a spike in missed payments.

Other notable highlights from the report:

The share of the population with a mid-range credit score of between 600 to 749 has shrunk from 38.1% in 2021 to 33.8% in 2025, with more moving either into lower or higher ranges.

Delinquency rates for credit products have largely increased, with auto loan delinquency increasing 24% since 2021. Bankcard and mortgage delinquencies increased 48% and 58%, respectively, since 2021. Personal loan delinquencies have dropped. 

Auto loans are now the most likely to be paid first, followed by mortgages then bankcards. Student loans are the lowest priority for payment.

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