The average FICO score, a widely used credit rating named for the Fair Isaac Corporation, is now 704, the highest it has been since before the Great Recession.
It hit that number in April 2018, according to a report from FICO released today, an increase of four points since the average score hit 700 for the first time in April 2017, MarketWatch reports.
Americans’ FICO scores dipped to their lowest average in October 2009, when they were just 686 on average, and have been climbing since.
There are multiple factors that lead to the rise in credit worthiness. For one thing, people know more about their credit and how to raise their scores than they did in the past, says Ethan Dornhelm, vice president of scores and predictive analytics at FICO.
What’s more: “Lenders have for a long time now, maybe in response to the Great Recession, been prudent in their underwriting,” he adds.
In other words, lenders are being more cautious and making loans to people who are more likely to pay them back. Just 23% of consumers with FICO scores today have any debts that have gone to collections, down from about 26% several years ago, he says.
Some consumers may have also benefited from a new policy that removed civil judgments from some people’s credit reports, improving their scores with the three major credit bureaus, Equifax, Experian and TransUnion.
