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.
I cut my credit cards up in 1983; haven’t borrowed anything since. I have no idea what my “credit score” is.
I have one only for transactions that require it. Like rental cars. Felt treated like an international cocaine dealer last time I tried paying cash for my rental vehicle.
Taco is taking good care of his billionaire friends and could care less about the middle and lower classes. In fact, wasn’t he quoted as saying, “let them eat cake?”
Trump figured out one lever he could pull to seem dramatically powerful: raise the cost of international inputs to our economy. Winning! Will this operate like some kind of malevolent virus that makes us stronger? Meanwhile the mirth in Beijing must be uncontainable.
Seems to me the middle classed is getting stretched with the upper moving up and the middle and lower getting pulled down.
The stock market seems to be downing well because that is where all the printed money is ending up. So its just inflation combined with ceo s juicing the stocks since that is part of their pay these days.
Inflation in the housing market may get hammered by rising ins rates. But helped by tariff cost on new.
The upper class will soon deflate and join the rest.
Almost two hundred thousand soldiers surround Jasa center, waiting for the order to attack. After recognizing a Palestinian state in the UN the Palestinian leaders might decide to save Rimal, trade hostages and end the war. Trump will sign a peace agreement between Israel and the Palestinian.
Alex bs: WTI at $60, before a 20% discount, deflates Putin, but he salivates bc Canada, the UK, France, Germany, Australia along with 150 other states will recognize a Palestinian state, splitting NATO vs the US in the UN next Mon.
Most low level debt, $5K to $30K, was accumulated by women with BA and MA. They get married, so their husbands will bust their asses and pay the bills, all ills.
Stick some Harry Caray glasses on them and soon they’ll be in a Corporate America C-Suite.
There have been typos popping up, Mish. So, I took the phrase embedded in the Claude.AI function on line:
“CHECK GRAMMAR and SPELLING: Did people thought Trump would change things for the better and now they have changed their minds?”
[The above was the INPUT request/command search into Claude.AI).
———————————————————————-
RESULT OF MY QUERY:
Here’s the corrected version:
Did people think Trump would change things for the better, and now they have changed their minds?
Changes made:
The sentence is asking about whether people who initially believed Trump would bring positive change have since changed their opinion.
——————————————————————-
Thus, Mish, might I recommend that you use Claude.AI and copy/paste your articles into the BOT and let it correct your articles.
There are too many mistakes made, and it is understandable considering your Workload (amazing, Actually, Mish!) so it would take less than 5 minutes to find the Spelling/Grammatical errors using AI and then your articles will not include obvious missed edits.
And, yes, I was an editor for an on-line Magazine, so I would actually now be replaced by BOTS such as Claude.ai.
p.s. I am a regular reader.
You should use the tools available. While you’re at it, I would also ask the AI to read your work and point out any ambiguities or places where your readers might be confused and then suggest improvements. Its up to you to take the suggestions or not, but at least you’ll be made aware of them.
Are you unable to determine his meaning? I didn’t think so
A vengeful Trump props up the unproductive as his economy falls apart
https://thehill.com/opinion/finance/5512232-a-vengeful-trump-props-up-the-unproductive-as-his-economy-falls-apart/
This information conflicts with a recent report from the major banks that credit card deliquency rates are declining.
Can you site said “recent report”?
Otherwise this sure looks like “fake news”.
Hedgeye research bank analyst Josh Steiner. Yeah fake news made it up myself.
– Although credit scores remain significantly higher than during the Great Recession. > That is a totally insignificant data point. One that will draw hype, but is absolutely meaningless as far as Today is concerned!!
– Of course they are down for the second year in a row. As stated: “FICO found a growing share of borrowers are falling behind on car loans, credit cards and personal loans.” WHO gave ALL these loans out to these people? > School Loans = Government (Must Pay Loans), and that gimmick imo, snared countless amounts of Students, Parents, Grandparents and More in its web of deceit. The deceit of Your High Cost Loan/Degree making you even close to enough money to pay your loans back. In other words a worthless degree, but money for the “Teachers Unions” you know, the ones that could care less about your children, to do such a horrendous thing to these unassuming youngsters! Many of these kids will never be able to pay these loans back, as a result, and now many will become debt slaves to the Government. May Never own a Home, almost impossible to get another loan for a new car, or have anything of value, as they will struggle for decades to get out from under.
– Gen Z borrowers experienced an average credit score drop of three points. > Not sure i buy this stat because we have been repeatedly told Gen Z is frugal and not borrowing like crazy, as was happening, and they caught on, and stopped. That’s the reports I have been seeing over the past year or so. Were those reports as fake as everything else we are being told?
>> It seems the old cliche “The Rich Get Richer, as The Poor Get Poorer” is back in vogue as they say. Welcome back Pasta, Water, Cereal etc. and Goodbye Trips, Partying, New Cars, and Fantastic Date Nights…
> ” Powell says risks to inflation are to the upside.
> Risks to labor market are to the downside.”
We’ve got ’em right where we want ’em. Right, Moe? Nyuk. Nyuk!
Who doesn’t appreciate a random Three Stooges reference?? I bet your favourite Batman was Ben Affleck.
The fourth bubble in liquidity/housing/equities is reaching new highs:
While housing is showing the first tiny cracks, the student loan “Victims” are finding out about being a “debt slave” with inextinguishable debt. They would hear “Mack the Knife” singing in the cafe’s at night if they were listening.
These bubbles have a way of becoming pervasive and affecting the investor class when the base of the economy dries up and the liquidity is removed.
All of this needs a “Black Swan” event to be triggered. NVIDIA’s vendor financing might qualify as their sales numbers depend on their many customers making a profit on AI when we all know that only a few will survive.
Does the credit score of the little guy that was too young to perceive the risk of “debt for a degree” matter to the bloated AI valuations? PLTR at 500 x earnings?
Not until the fat lady sings…
>>>
most amazing part they measure it by ELECTRICITY USAGE (gas=nuclear)
jesus! it is 2025
even site;s click metrics in 1998 were more reliable and indicative!
“the student loan “Victims” are finding out about being a “debt slave” with inextinguishable debt”
“The government is good at one thing. It knows how to break your legs, and then hand you a crutch and say, ‘See if it weren’t for the government, you wouldn’t be able to walk.’” – Harry Browne, former LP presidential candidate
Accounting for the Rise in College Tuition
Grey Gordon, Aaron Hedlund
September 28, 2015
http://www.nber.org/chapters/c13711.pdf
Excerpt:
“These results accord strongly with the Bennett hypothesis, which asserts that colleges respond to expansions of financial aid by increasing tuition. Existing theories can fully explain the increase in net tuition between 1987 and 2010. Our model suggests demand-side theories have the most predictive power. In fact, our results show the Bennett hypothesis can fully account for the tuition increase on its own.”
The Bennett Hypothesis: “Increases in financial aid in recent years has enabled colleges and universities blithely to raise their tuition, confident that Federal Loan subsidies would help cushion the increase.”
On housing, a few months ago I asked Grok to calculate inflation adjusted home prices now versus just prior to the sub-prime crash and it calculated that they are 10% higher now.
That gimmick of school loans being paid off by the Taxpayers, has cost countless young a fortune! They went out and spent that money, and were being led to believe they won’t owe it, so go for it! The Automobile Makers jumped all over it! The Schools jumped all over it, The CC companies jumped all over it Etc.
And every one of them thinking they had to go to college as a foregone conclusion. Not even questioning taking on the debt… Now they are stuck with the debt and no jobs to pay it with for quite a few of them.
As an unintended consequence, the trades are sucking mud
Trades are also charging a well deserved fortune, for their “License + Skill Set” People, Schools, Cities & Towns etc. just forgot about them all. Heck, Machinist have been strongly desired for over 40 Years Now!!! We need lots of updated infrastructure, so they are on their way back, if only by pure need and bodies available.
RE is bank’s assets. The banks constrict supply, before the boomers die. Gen X, who sent their kids to med and law schools, carry the highest student loan debt. When their MBA, lawyer and doctor kids earn $150K/ $$450K per year they pay mums and pops debt. Twenty years ago, in 2002, gold was $260, today $4,000. Houses are up x3/x5 times. MIT is up from $36K/Y to $90K/Y. Berkely, Stanford, Harvard, U of PA are startup kings. VC money are pouring in. Trump $100K barrier prevent Satya Mandela from flooding MSFT with H1B Indian Locusts, who chewed up American jobs. The zoomers and gen alpha are better than the hippies of the sixties. I bought two senior coffee black from Col Mickey D. The shift mgr is 18Y. The takeout window girl is 14Y.
Don’t forget Sundar Pichai and Timmy. Timmy, please bring back your Indian army.
article on ZH says
====
Baltimore High School Fails To Produce A Single Proficient Math Student In Four Straight Years
=====
yeah , USA hi tech gonna have bright future. w/out Indians
Digital tech competed first with parents, then schools, demolishing learning with flashy distractions. The parents abdicated their duties to the devices, second generation by now. I have students arriving in my college classes who struggle to construct a valid English sentence. Simple capitalization and punctuation is missing. The American-born are particularly bad. In the fifth week of classes now, many can’t keep the focus up, and can’t log (in 24 full hours allowed) into a Friday simple 5-question quiz. In many decades I’ve never seen so many people failing simple tasks and deadlines. The attention economy is devastating to (wait for it): attention.
ChatGPT competes with Chrome. AI cannibalized Googl, Meta and AMZN.
Without citing a valid reputable link this sure looks like false news.
And yeah, for me, ZeroHedge by itself “second hands” many articles and some of the sources, for me, are sketchy soruces
With an absolute math moron running this shit show ~ what should we expect?
We have a president that thinks drug prices can go down 1,500% and bankrupted a casino. Trump also states that tariffs have collected trillions when only bringing in a few hundred billion against the crippling and destructive costs to business.
Elections have consequences.
>>>
You do realize that you just stated “Trump also states that tariffs have collected trillions when only bringing in a few hundred billion.
So Trump has already brought in (collected) “A Few Hundred Billion” from Tariffs… That’s Awesome!!!
“I dinnint lurn nuffin’.”
i hope Mish post about h1-b visas and new $ 100.000 fee
=====
i am reading about this on ZH.
in one article everybody in comments cheering up about new fee basically saying
=indians go home =
and i wonder about ceo of Google (indian) and ceo of Microsoft (=indian)
and other article on ZH says
====
Baltimore High School Fails To Produce A Single Proficient Math Student In Four Straight Years=====
yeah , USA hi tech gonna have bright future. w/out Indians
alx
ps
disclaimer .I did receive my h1-b many many years ago. in USA
Trillions are pouring in to the US. When those co start hiring Indian and Chinese H1B tsunami will flood the country. Trump wants to stop their invasion before it starts.
=Trillions
by whom, from where ??
USA runs $2 trln budget deficit. 1 trln trade deficit !!
do you even comprehend those figures?
=====
you sound like USSR tv in 1985 .
sorry pumpkin it is NOT 1985 . people knows this kind of economics sh11it
alx
China is lapping us in clean tech. EVs, windmills, solar. Orange guy says we will triumph, maybe like once it was said the miracle “vengeance weapons” would push the Yanks off the continent. Maybe so, but this is a very volatile poker game, in the hands of a guy who knows nothing else. Lots of humans are bound to fall through the cracks. Who takes the first losses? Of course always the poorer cohorts, but now my money says the next layer of equity, the former middle class, a vestigial, redundant overhang (in the minds of some) from the big team sports known as the global 1900s. This at worst gradients of predation and zero-sum might look vaguely like USSR undoing in 1990s. We are, IMO, in some sort of state change, like a pond going from 3000 species to 30. Evolution speeds up and can go fractal for many. Interesting times.
Alex bs: the budget deficit was caused by the Biden’s dictatorship. Trump is the first president in a 100 years who cut gov size, instead of expanding it, along with bringing industries back onshore. The fatso socialists, the Putas, the addicted resist the change.
= Trump is the first president in a 100 years who cut gov size
ahahha ! aahah!!!
uneducated mor1on/.
last time USA fed budget was in black during 2d term of clinton!!!
======
during bush jr, and obama debt doubled. in raw figures!!
biden and trump both run $2 trln deficit!
======
TRUMP DID NOT CUT ANYTHING, ALL money he ‘saved; went into defense budget
so now,. get lost mo11ron
Gore’s reinventing government program cut 250000 jobs from the fed payroll. They will post anything here.
=, instead of expanding it, along with bringing industries back onshore
ahahha!!! mor11on
there will no BE NEW JOBS IN USA.. on permanent basis
you would know if ever run lemon stand!
=====
you can;t hire/find decent hard working person in USA for less then 40*50 $ per hour!
McDonald’s cant find people who works for 20 $ per hour at cash register!
=======
in china YOU CAN FIND ANY AMOUNT HARD WORKING PEOPLE
for 500$ per month!!!
it is called salary arbitrage. unless USA fully stops importing from 3d world, nothing will change!!!!
=====
and YOU KNOW, Donny=TACO ONLY threatened CHINA W/. TARIFFS, NEVER PULLED TRIGGER!
why? cause he finally understood where and how all this s11hit in wall mart is produced
apparently you still have no clue !
alx
You are describing excessive population. Humans are cheap, life is cheap.
trump will never sleep with you. You’re too old.
Student loans are zoomer’s parents debt, too. When gen X send 2/3 kids to
$60K/ $90K/Y schools they pile up hundreds of thousand in debt. Their collateral is their house and their 401K. When NVDA and Googl parabolic move will stop, bc ChatGPT chew up Chrome the delinquency rate will rise., Student loan debt is up from $1.5T in Q1 2023 to $1,545T, after Biden’s jubilee. There is no recycle bin in student loans. They will stay at high plateau.
CNN botched the story. I found the original FICO report (from 9/16)… CNN is so lame they didn’t even link to it:
https://investors.fico.com/news-releases/news-release-details/fico-releases-inaugural-fico-scorer-credit-insights-report
The “2 point decline” hyped by CNN was reported by FICO back in February. It was news in February b/c of student loan delinquencies kicking back in. It’s not news now. The first bullet point in the FICO report says the mean score has been stable since February, and CNN completely neglects to cover it (bold added by me):
The real value of the FICO report is the evidence they provide for the “K-shaped recovery”. FICO just says it straight up (bold added by me):
This is the key point of the FICO report. With the labor market weakening, a big chunk of the consumer population is struggling. At least CNN managed to almost get this quote straight:
Delinquency rates are “more consistent with an economy in recession than one still in expansion,” FICO said.
Early stage of recession, not peak recession.
P.S. Unlike CNN (which just has to spew clickbait to deliver eyeballs to advertisers), FICO has a national customer base and a business reputation to maintain. And FICO knows their data better.
I think credit scores are the least of people’s worries.
Beef is about to become the new ‘eggs’. Ribeye steak is currently $27.99/lb. Stock up now. Next year it will be over $50/lb and be kept behind a locked cabinet.
The US farm economy is collapsing. Does not bode well.
Meanwhile, gold is going parabolic and silver is following right along.
The farm economy is okay. Crop prices are low, food supply is abundant.
Beef market got cornered by monopolists and herds got cut (by cow-haters?). That can be fixed. But it’s a beef-market-specific thing, just like eggs was a bird-flu-stupid-response thing. Not an existential crisis unless the only thing you know how to eat is ribeye.
All prices of what I eat in my market just went up, and I do not eat beef. Could be transitory.
Anybody who stocks up on ribeye should also remember to stock up on statins.
It wouldn’t be a comment section about zoomers without the elderly moaning about how it’s just the kids! Maybe they should have saved up more as toddlers! Or maybe they should have just become plumbers instead of getting a stupid “college degree” or whatever.
Certainly this couldn’t be the fault of a nation that prints so much money there are more real greenbacks floating around than there is literal monopoly money. And obviously the random weekly tariffs have zero to do with manufacturing jobs drying up (the local major auto manufacturing plant has two jobs right now, both senior level). “This isn’t a recession, it’s just lazy kids!” shouts the baby boomer whose Social Security is about to go bye-bye.
You must be reading different comments than I am. I see almost none of that.
If you don’t like the boomers then just unplug
Gunsmoke
Matlock
Murder ……….She Write
A 3-point drop in annual FICO scores for GenZ – is that statistically significant?
Statistically significant starts at 2.5 so yes, this would be strong significance actually in experiment terms.
It’d be more significant if it wasn’t old news from February…
That’s standard deviations from the norm, dude!
well if range is 3 points, yes
if range 10000 points. nope!
hope i helped :))
Okay. What’s the range here, then?
Oddly enough, having no debt, or not having the right ‘mix of debt’, lowers FICO score.
Not so sure about the no or low FICO when being debt free. We’ve had no debt for 15 years and our FICO score is down 7 points.
Debt freedom doesn’t make your score low, it just keeps it from being at the absolute top of the range.
Keep in mind that the score is used to judge credit risk, should you decide to borrow again. A debt-free person who suddenly needs a mortgage might in fact be more of a credit risk.
I paid off my house, and my FICO score when up, not down.
I guess I’d like to have more data. I’m sure, in general, FICO scores tend to rise slowly until there’s a economic downturn.
Posting about 3 point drop without additional data like what the x-bar is over the last 10 years or during the GR for the generation in Gen Z’s position at that time would be helpful.
We’re debt free and our FICO scores are over 800.
Covid stimulus payments (not just the early checks, but the three years of ongoing payments) and all the loan forbearance shenanigans artificially propped up credit scores. Everyone with a brain knew this was happening and could see it.
The first generation to grow up digitally has the worst credit rating. Maybe digital devices are a big part of the problem of low credit scores. The digital age is all about consumption and instant gratification, which debt facilitates. It doesn’t help that parents handed over their responsibilities to the World Wide Web.
It would be interesting if we could somehow correlate spending. It was noted almost 10 years ago that the average teen child assumes that there first home will be as good or better than their parents current home (which may be their 3rd or 4th upgrade up the ladder from their original starter home). As a 60s baby … I always had it drilled into me to live below my means. This meant room-mates early in adult life and buying a duplex (that I really couldn’t afford) as my first house (rates were only about 16% when I bought).
As an aside, it is odd that renting is now 1/2 the price of buying … and so many people think that this is because of greedy landlords. Logic is not something all people seem to grasp.
I’m sure Blackrock owning gigantic swathes of land and millions of homes in order to manipulate the market has nothing to do with it.
OK, so you think Blackrock buying millions of homes (this trend has reversed, but you’re passionate so let’s not let facts get in the way) … so that they could make far less money? I guess you thnk Blackrock is evil AND stupid.
To be fair, wherever you find evil, stupid isn’t far away.
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What A Show!