The average credit score in the United States has dropped for the first time in a decade.

The National average FICO score dropped one point in the past year to 717. Scores can range from 300 to 850. The higher the score, the better for consumers.

Credit scoring company FICO says the decrease is driven by increases in missed borrower payments and consumer debt levels.

As of October 2023, slightly more than 18% of the population experienced a 30-day or more past-due payment on one or multiple credit accounts within the previous year. This is up by 4% compared to April 2023, according to the report.

Given that the FICO Score is a lagging, not leading, economic indicator, this suggests that the effects of high-interest rates and persistent inflation may be starting to weigh on consumers, especially those already struggling to manage their finances, the company warned.

Can Arkali, a senior director at FICO said, "Whether this average score drop is an anomaly, or an early warning of an inflection point in consumer repayment behavior will depend on a few factors: will high inflation and elevated consumer prices continue to place financial stress on borrowers and lead to more missed payments and increased debt levels."

A credit score is a number that is used to predict how likely someone is to pay back a loan. The higher the score, the more confident lenders are that a consumer can repay the loan.

Those people are offered better credit rates.

The report showed that new credit activity has slowed down. That appears to be tied to a decrease in mortgage activity.