The saga of the bifurcated economy continues. Gen Z getting hammered.

Credit Scores Plunge

Trump says the economy is booming. But FICO notes credit scores are down for the second year. .

CNN comments Credit scores drop at fastest pace since the Great Recession

The national average FICO score dropped by two points this year, the most since 2009, according to data released Tuesday by the analytics company.

Although credit scores remain significantly higher than during the Great Recession, they are down for the second year in a row. FICO found a growing share of borrowers are falling behind on car loans, credit cards and personal loans.

Younger Americans, exposed to the double whammy of high student debt and low entry-level hiring, are under even more financial pressure.

Gen Z borrowers experienced an average credit score drop of three points — the biggest decline of any age group since 2020 during the pandemic, according to FICO.

The findings underscore the growing disconnect between the euphoria on Wall Street and pessimism on Main Street. While US stocks continue to shatter record highs, a significant chunk of Americans say they are hurting.

“We’ve seen a K-shaped economy where those with wealth tied to stock market portfolios and rising home values are doing well and others are struggling with high rates and affordability problems,” Tommy Lee, senior director at FICO, told CNN.

FICO found that delinquency rates on auto loans, credit cards and personal loans are at or near their highest levels since 2009.

These delinquency rates are “more consistent with an economy in recession than one still in expansion,” FICO said, adding that mortgage and home equity loan delinquency rates are still near historic lows.

FICO found that 14% of Gen Zers have had a large credit score decline of 50 points or more in the past year — more than any other year and double the decline of 2021.

Between February and April, 6.1 million consumers had a student loan delinquency added to their credit file, according to FICO. That means the student loan delinquency rate has climbed to a record high of 29% among the 21 million borrowers with a student debt payment due.

Gen Z Struggling

Consumer Sentiment Has Been Pessimistic for a Decade

On September 13, 2025 I noted With One Brief Exception, Consumer Sentiment Has Been Pessimistic for a Decade

Guess what. Consumers seldom think the future will get any better. However, from June through November of 2024, consumers got their hopes up.

Did people thought Trump would change things for the better and now they have changed their minds?

In t’s latest FOMC meeting the Fed Notes “Challenging and Unusual” Setup on Unemployment and Inflation

Powell says risks to inflation are to the upside. Risks to labor market are to the downside.

Related Posts

August 23, 2025: It’s Now Twice as Expensive to Buy an Entry-Level Home than Rent

Thinking of buying a starter home? Be careful!

September 12. 2025: Consumer Sentiment Sours in September, Inflation Expectations Rise

Sentiment downturn is strong in lower- and middle-income levels.

Tariffs and student loan issues are mounting. Housing is a mess and food prices are rising.

FICO scores match sentiment readings. No one should be surprised by this.

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