MaxDecisions: US Consumer Credit FICO Score Drops as Delinquency Rises in 2023

MaxDecisions analyzed nearly 170 million consumer records from June 2021 to October 2022, documenting significant credit deterioration among subprime and near-prime segments amid inflation and unemployment pressure.

The average FICO score fell five points, from 720 to 715, over the period -- with lower credit bands experiencing steeper declines of roughly 20 points in some subprime segments, as supply chain disruptions from 2019-2022 drove widespread price increases and Federal Reserve rate hikes restricted consumer borrowing.

Credit card interest rates surged from about 16% to 19% within 12 months, disproportionately affecting lower-income consumers. MaxDecisions expected lenders to adjust underwriting criteria and see higher acquisition costs, lower conversion, and increased demand for debt consolidation through 2023.