High interest rates and elevated inflation since the US Federal Reserve's aggressive monetary tightening campaign have translated to more missed payments and rising debt levels. Moreover, last year's average FICO credit score declined for the first time in a decade, as outstanding credit card balances transitioning to delinquencies have continued to increase since 2022.
A credit score determines your creditworthiness. Lenders check your credit profile to understand how you carry and repay debt responsibly. Factors like missed payments, high utilisation of your credit balance, and applying for new cards too frequently impact credit scores.
