The average American’s credit score is holding steady. Beneath that stability, however, the divide between financially secure consumers and borrowers struggling with housing costs is widening.
The national average FICO Score stood at 714 in April, unchanged from October 2025 and one point lower than a year earlier, according to FICO’s new Fall 2026 Score Credit Insights report.
Mortgage delinquencies initially appeared equally reassuring. The share of borrowers 30 days behind declined to 1.35% from 1.42% a year earlier.
But those averages obscure mounting pressure among lower-scoring borrowers and a mortgage payment that has grown much faster than inflation.
The average monthly payment for a first-time homebuyer reached $2,563, a 57% increase since 2019, according to FICO. Mortgage balances among consumers with scores below 620 increased 43% over the same period, compared with cumulative inflation of approximately 30%.
Subsequent mortgage delinquency of at least 90 days increased exclusively within the lowest score bands, FICO found, while remaining stable among consumers in every higher score range. That concentration mirrors recent Mortgage Bankers Association data showing that overall delinquencies eased while serious distress among FHA borrowers continued to deepen.
“Affordability is the defining story in our latest edition of the FICO Score Credit Insights report,” said Ethan Dornhelm, head of scores analytics at FICO. “Costs have risen across nearly every credit product consumers use, and yet delinquency has improved or held steady across every major loan type.”
“The stability of the national average FICO Score at 714 reflects the resilience many consumers continue to demonstrate,” Dornhelm continued. “At the same time, the data shows that resilience isn’t being tested equally, with lower-scoring and thin-file borrowers facing the greatest pressure.”
Creditworthy Does Not Always Mean Mortgage-Ready
The findings point to an increasingly important distinction for mortgage originators: A consumer can maintain a solid credit score without having the income or monthly cash flow needed to support today’s housing costs. Debt-to-income ratios now account for more than one-third of mortgage denials, according to a White House economic report released earlier this year.
FICO’s findings indicate that payment capacity, rather than widespread deterioration in credit behavior, remains a central barrier to homeownership. A higher credit score may improve a borrower’s financing options, but it cannot fully offset the effect of elevated home prices, mortgage rates, property taxes, and insurance premiums on the monthly payment.
Separate July data from VantageScore reinforced the picture of broadly stable consumer credit. Its latest CreditGauge report showed that delinquencies improved across all VantageScore credit tiers.
Early-stage delinquencies, defined by VantageScore as accounts 30 to 59 days past due, declined to 0.89% from 1.05% in July 2025. Mid-stage delinquencies also fell, while late-stage delinquencies were unchanged.
Average credit card balances increased 0.9% to $6,450, but consumers used less of their available credit. The average utilization rate declined to 30.15% from 30.55% a year earlier.
The average VantageScore slipped to 701 but remained within the 700-to-702 range recorded during the previous year.
FICO and VantageScore use different scoring models, populations, and observation periods. Their respective averages of 714 and 701 are therefore not directly comparable and do not indicate that consumers necessarily receive scores 13 points lower under one model.
More Debt Without Immediate Score Damage
The consumer-credit data also reveal pressure that may affect mortgage qualification before it produces a substantial decline in credit scores.
VantageScore reported that personal loan originations increased to 3.49% in July from 2.98% a year earlier. That represented a 17% relative increase and the strongest annual growth among the major non-mortgage products measured by the company. The increase extended a trend NMP identified in May, when personal-loan originations reached a nine-month high of 3.41%
Millennials and members of Generation Z recorded the largest increases in personal loan originations.
Personal loans may help consumers manage elevated living costs, but their required monthly payments can raise debt-to-income ratios and reduce mortgage purchasing power even when borrowers continue making payments on time.
FICO’s consumer survey found additional signs of financial strain. Twenty percent of respondents said they had made less than the minimum payment or skipped a payment on a credit card or loan during the previous year.
Buy now, pay later services were being used by 41% of respondents, including 66% of Gen Z consumers and 57% of millennials. More than one-third of respondents (37%) said they relied on someone else for ongoing financial support, most commonly their parents.
The generational picture is particularly mixed. Gen Z consumers have increased their average FICO Score by 17 points since before the pandemic, while millennials have gained 10 points. At the same time, those generations report heavier use of alternative financing and are leading the growth in personal loans.
For the mortgage industry, stronger credit habits among younger consumers have not necessarily translated into greater capacity to absorb the cost of homeownership.
Student Loan Delinquencies Hit Millions Of Scores
The return of student loan delinquency reporting has created another fault line in the potential homebuyer population.
Approximately 3.2 million consumers with a student loan payment due had a recent delinquency and experienced an average 38-point year-over-year decline in their FICO Scores, according to the report.
By comparison, borrowers who consistently made their student loan payments gained an average of six points. Consumers without a recent student loan delinquency gained 16 points.
A 38-point decline could move some prospective borrowers into a different mortgage pricing or eligibility tier, depending on their starting score, loan program, and lender requirements.
The national average of 714 consequently masks significant movement in both directions: Millions of consumers are building stronger credit profiles while a distinct group of student loan borrowers is experiencing sharp score deterioration.
Competition Between Credit Models
The reports also arrive as the mortgage industry continues to navigate competition among credit-scoring models. FICO is emphasizing risk segmentation and its long-standing lender adoption, while VantageScore is promoting broader inclusion and its use of expanded credit data.
For originators, however, the distinction between an average score of 714 and 701 is less important than what both reports reveal: Borrowers may be protecting their credit, but many still cannot support today’s housing payments.
Stable scores are masking widening differences in income, debt, student loan performance, and the ability to afford homeownership.
