The average FICO credit score hit a record high of 711 this past July. This uptick to the score may come as a shock, especially since it has taken place several months “knee deep” amid a global pandemic, FICO representatives told CNBC Make It. 
Even as tens of millions of American workers are currently unemployed and the majority of the nation is still feeling the pinch of the pandemic—leaving them struggling to pay living expenses and loans each month—the FICO scores went up, and up. But experts have an explanation as to the reasons for the uptick, mainly that the FICO scores don’t shift rapidly, thus aren’t necessarily indicators of the current economic climate.
Ethan Dornhelm, the expert in charge of the research and analytic development of FICO scores globally, explained this in a bit more detail: “The FICO score shouldn’t be thought of as a leading indicator or as a predictor of where the economy is headed. In fact, there’s typically a “bit of a lag” between when a major macroeconomic event occurs, such as a recession, and when the average FICO score is going to reflect that.”
For instance, when America was hit with the devastating impact of the Great Recession, the average U.S. FICO score did not immediately plummet. Instead, the average FICO score did not drop drastically until the latter part of 2009, which was nearly two years after expert economists officially declared that the recession first began.
Also according to Dornhelm, as well as this normal time lapse that is usual with FICO scoring data, experts are pointing to the relief that the federal government and lenders provided at the onset of the COVID-19 pandemic for further reasonings why the lower credit scores were delayed/mitigated.
Dornhelm explained: “The degree of coordinated government intervention and stimulus spending is different this time around relative to prior crises.” He then added that various other aid, such as the stimulus payments in the CARES Act, the forbearance programs, and the enhanced unemployment benefits, have also provided a proverbial life raft to borrowers—helping them keep their heads above water during this financially depressed time of struggle.