PITTSBURGH (KDKA) — While the economy plunged during the coronavirus pandemic, credit scores reached record highs.
In July, the average FICO credit score reached a record-breaking 711 points.
“Whereas, a year earlier, they were about 706,” said Dorene Ciletti, a consumer analyst at Point Park University. “And even if you think about timeliness and how quickly this occurred, the average credit score in April was 708.”
The boost began right around the time when deposits were dropping into people’s bank accounts from the first coronavirus stimulus package. Instead of economic investment, consumers saved money and secured their finances.
“They are deciding to pay down some of their debt, hold some of that money close, and not making those purchases that perhaps, with the stimulus, we were anticipating,” said Ciletti.
Brian Mann, a frontline worker from New Castle, did just that.
“I ended up getting bonuses from work for working during the pandemic and got the stimulus check and I never really spent any of it because there was nowhere to go to spend it on,” said Mann.
Mann says his score rose 50 points to a comfortable 760. The personal investment unlocked new opportunities and the door to a new house.
“I wouldn’t have been able to do that if any of this wouldn’t have happened,” said Mann.
Ninety percent of lenders use the FICO credit score to measure the credit-worthiness of consumers. Scores range from 300 to 800. The new record places the average borrower in the “good” credit range.
While many consumers, presumably, did not use the first round of stimulus to boost the economy through spending, things could rebound. Data from CouponCabin suggests consumer confidence is climbing.
Other than saving, to reach the new credit average, financial experts remind consumers to cut back on applications.