In a decade, the average credit score has fallen for the first time - where does your credit score stand?

Since 2013, the average credit score has been declining, as reported by FICO, the company that provides credit scoring models used in 90% of lending decisions.

In April 2023, the average FICO score reached a record high of 718, but by October of the same year, it had decreased by one point to 717.

In 1989, FICO scores were introduced and range from 300 to 850. Although there has been a decrease, a 717 is still considered a "good" credit score (670 to 739).

High interest rates and persistent inflation were identified as contributing factors to missed payments and increased debt levels. On-time payments account for 35% of an individual's FICO score calculation, with 18.1% of Americans falling behind on credit card payments in October 2023, a 4% increase from April 2023. Credit card debt reached $1.13 trillion in the fourth quarter of 2023, up $50 billion from the previous quarter, according to the Federal Reserve Bank of New York. A strong job market, slowing inflation, and the removal of medical debt from credit reports helped prevent scores from sliding further, FICO stated.

Credit cards for people with poor or fair credit

Despite having a below-average FICO score, you can still obtain credit cards. One of the simplest cards to secure is the Discover it® Secured Credit Card, which does not require a credit score and offers rewards. This card automatically earns 2% cash back at gas stations and restaurants, up to $1,000 each quarter, and 1% cash back on all other purchases. As a welcome bonus, Discover will match all the cash you've earned after the first 12 months.

Seven months after opening your account, Discover will evaluate your eligibility for an unsecured line of credit and refund your $200 security deposit.

An unsecured Capital One QuicksilverOne Cash Rewards Credit Card is available to those with fair credit if they want to avoid a deposit. (see rates and fees)

The annual fee for this card is $39, but it offers a competitive 1.5% cash back on all purchases with no limit on the amount of cash back you can earn. Additionally, it allows you to monitor your TransUnion and Experian credit reports through CreditWise®.

How to raise your credit score

FICO breaks its credit scores into five brackets:

• Poor: 300 to 579
• Fair: 580 to 669
• Good: 670 to 739
• Very good: 740 to 799
• Excellent: 800 to 850

Improving your credit score can lead to numerous benefits, such as lower mortgage rates and better credit card rewards. Fortunately, there are several simple steps you can take to boost your score.

The most significant aspect of your FICO score is your payment history, so it's crucial to pay your bills promptly and in full. Additionally, you can request your credit card company to increase your credit limit, which will decrease your credit utilization ratio, but only if you refrain from using the extra credit.

Experian Boost™ is a complimentary service that links timely payments of utility, phone, and subscription bills to your Experian credit report. Additionally, members receive gratis credit monitoring and a free FICO Score.

On average, users who experience an improvement in their FICO scores see a 13-point increase, as stated by the company.

Experian IdentityWork℠ Premium provides users with regular updates on their basic FICO score and reviews data from all three credit bureaus to inform them about score changes, new inquiries and accounts, changes to personal information, and suspicious activity.

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Bottom line

Although the average FICO Score in the U.S. has decreased by one point to 717, this is still considered a good credit score that allows access to the best interest rates and credit cards with competitive rewards. If your score is below average, there are several strategies you can employ to enhance it.

Why trust CNBC Select?

Our mission at CNBC Select is to deliver top-notch service journalism and in-depth consumer advice to our readers, enabling them to make informed decisions with their money. Each credit monitoring article is the result of thorough reporting by our team of expert writers and editors, who possess extensive knowledge of credit scores and credit products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content independently, without any input from our commercial team or external third parties. We uphold the highest journalistic standards and ethics.

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Not all lenders use Experian credit files or scores, and some may not see improved scores or approval odds.