Missed student loan payments continues to hurt Americans’ average credit score, but the pain is evenly distributed, according to the credit scoring company FICO.

The national FICO score, or three-digit number used to summarize your credit report, fell a point to 714 from April 2025 and two points from October 2024, the company said in its latest FICO Score Credit Insights report. The drop was driven primarily by resumed student loan delinquency reporting and a slight uptick in mortgage delinquencies, FICO said. Declining 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.

At the same time, a record 48.1% of consumers now have FICO Scores of 750 or higher, reflecting the "K-shaped economy." A K-shaped recovery means economic improvement is uneven, with some people moving up while others continue to move down or struggle.

"The result is a credit market that's both more challenging for some and more rewarding for others—a dynamic that requires more nuanced strategies from lenders," said Ethan Dornhelm, head of scores analytics at FICO.

FICO scores range from 300 to 850, with a higher score indicating lower risk to lenders and a lower score suggesting a higher risk.

The share of Gen Z, defined in FICO’s report as 18-29-year-olds, saw at least a 50-point decrease in their FICO scores, jumping to 14.4% from 11.3% between October 2024 to October 2025. That compares to an increase to 10.1% from 8.8% for the overall population, FICO said.

"This is likely due to ongoing issues with student loan repayment," the report said.

Gen Z has been opening credit cards.

"Market speculation suggests Gen Z has shifted away from traditional credit cards in favor of alternative lending products," particularly buy now pay later, FICO said. "The data tells a different story: A higher percentage of Gen Zers open new bankcards than any other age group, which in reality positions them as the most active cohort in traditional credit card adoption."

But more credit cards doesn’t mean they’re spending recklessly. Instead, "findings point to a shift in how consumers relate to credit—it’s no longer passive, it’s intentional," said Jenelle Dito, vice president of consumer empowerment programs and partnerships at FICO. "People are monitoring their credit and thinking strategically."

More than three-quarters (77%) of Americans consider interest rates when applying for a credit card, with 29% saying they won't apply unless rates drop to a certain point, FICO said.

Overall, 83% of Americans said maintaining or improving their credit scores is a priority for them this year, FICO said. However, inflation and affordability challenges forced nearly one in four people make less than their minimum payment or skip a credit card or loan payment in the past 12 months.

About 111 million Americans, or more than 40% of adults and half of credit cardholders, cannot afford to pay off their balances and carry more than $1 trillion in credit card debt from month to month, according to an analysis by Protect Borrowers and The Century Foundation.

Student loan delinquencies have put the most pressure on the average FICO score as repayments and reporting resumed at the end of 2024, but that’s now stabilizing, FICO said.

Nearly one-third, or 7.1 million, of student loan borrowers who had a payment saw a new delinquency reported on their credit file, FICO said. That pushed their credit scores, on average, down 62 points since January 2025.

"After severe delinquency on student loans took a big jump in April due to resumption of delinquency reporting, there was only a 0.1% increase in student loan delinquency between April and October 2025," it said.

Mortgage delinquencies have been ticking up to pre-pandemic levels, FICO said. Delinquency rates are nearly double the rates from October 2021 but have taken longer to reach pre-COVID levels, buffered by rising home prices.

Home appreciation allowed Americans to leverage home equity and refinance opportunities to avoid delinquency, FICO said. Now, many markets throughout the U.S. are seeing home prices coming down from their 2022 highs, according to the Federal Housing Finance Agency.

"With delinquencies continuing an upward trajectory toward pre-pandemic levels, this sector requires ongoing vigilance during this period of continuing market transition," the credit scorer said.

FICO analysts also warn that even as Americans aim to maintain or improve their credit scores, an education gap remains that could prevent them from succeeding.

"Fundamental knowledge gaps remain about the credit behaviors that actually qualify them for better (lending) terms," FICO said.

For example, two out of three Americans either incorrectly believe income directly affects credit scores or acknowledge they are unsure whether it does. That's "a misconception that could prevent consumers from recognizing that credit improvement is achievable through behavioral changes rather than higher paychecks," FICO said.

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.

This article originally appeared on USA TODAY: Average FICO score drops again due mostly to student loans