Written by: Eric Bank
Edited by: Lillian Guevara-Castro
Reviewed by: Adam West
Key Takeaways
The average U.S. FICO Score dropped to 715 in February 2025, marking a two-point decline since last April and signaling the first notable dip in several years.
The decline, confirmed in FICO’s latest analysis, ends a long period of score stability and is sending a clear signal to the subprime industry: Consumer credit risk is back in the spotlight.
The primary culprit? The return of federal student loan delinquency reporting. During the COVID-19 emergency, borrowers with paused loans were shielded from having missed payments reported to credit bureaus.
That changed in October 2024 when the payment freeze officially ended. But the real hit came in February 2025, when a five-month grace period expired and millions of delinquencies started appearing on credit files again.
Millions of Student Loan Delinquencies Surface
According to FICO, about 2.7 million borrowers had a delinquent student loan reported as of February. Even more concerning, another 5.4 million borrowers had yet to make a single payment since the payment pause ended — suggesting a larger wave of delinquencies may be on the horizon.
About 2.7 million borrowers had a delinquent student loan as of February 2025.
Tommy Lee, senior director of Scores and Predictive Analytics at FICO, said the modest decline in the national average FICO Score is consistent with the anticipated effects of resuming student loan delinquency reporting.
“As we move through 2025, we’ll continue to monitor how consumers navigate the post-forbearance credit environment as well as the ongoing economic uncertainty,” he said.
Delinquencies Now Outpace Pre-Pandemic Levels
The data shows that 8.3% of consumers had a 90-day delinquency in the last six months, compared to 7.4% in January. That surpasses the January 2020 pre-pandemic level of 8.1%, signaling that today’s consumer is in rougher shape than many credit models had priced in.
8.3% of consumers have had a 90-day delinquency in the past six months.
While student loans explained most of the movement, there were some small countervailing trends. For example, average credit card balances fell slightly between January and February, likely as consumers paid down holiday bills. This helped improve credit utilization rates modestly — offering a small buffer to overall scores.
Uneven Impact Among Score Tiers
Another detail from the report worth noting: Consumers with lower credit scores were hit the hardest by the recent reporting changes. Those in the sub-670 range saw steeper declines than prime and super-prime borrowers, reinforcing the idea that financial fragility is unevenly distributed.
In response, some lenders may look to re-segment their portfolios or adjust pricing strategies to absorb this new layer of risk.
The data marks a turning point for subprime lenders. Many have relied on a long stretch of positive credit performance to underwrite risk with confidence. Now, with FICO Scores trending downward and student loan repayment behavior in flux, risk models that don’t account for this reemerging data could be flying blind.
For credit-building issuers, the report also represents a reminder that many consumers — especially those with limited incomes — are navigating tough waters. Flexible repayment tools, income-adjusted underwriting, and real-time data may be the key to maintaining performance and retaining trust.
