Credit score on the decline? This could be why

Even as the economy strengthens – with the labor market adding 266,000 jobs in November – some Americans are seeing one key personal indicator fall: their credit score.

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According to a note from Deutsche Bank Research sent to clients on Monday, credit scores among people aged 30 to 59 declined as of June when compared with April of last year.

A credit score between 670 and 739 is generally considered “good.”

CREDIT SCORE ON THE DECLINE? THIS COULD BE WHY 

IS YOUR CREDIT SCORE ACCURATE?

The potential culprit? Higher delinquency on auto loans, researchers posited.

Auto loan balances increased by $18 billion in the third quarter, according to the New York Federal Reserve Bank, to $1.32 trillion.

While aggregate delinquency rates rose in the third quarter to 4.8 percent, researchers noted that underwriting standards tightened for auto loans, and the median originating credit score rose 8 points to 771.

About 2.34 percent of auto loans were in serious delinquency, or 90 days-plus overdue. That rate is on par with the second quarter.

However, in the first quarter, auto loans considered in serious delinquency hit 4.3 percent.

According to Experian, the average FICO score in the second quarter was 703, though the average scores tended to vary by age. Americans between the ages of 20 and 29 had the lowest average score, 662, compared to people aged 60 and over, whose scores averaged 749. The state with the highest average credit score as of the second quarter – 733 – was Minnesota.

The average FICO credit score reached 704 last year, according to a report released by the scoring company, an all-time high.

As previously reported by FOX Business, there are mounting concerns that credit scores don’t accurately reflect probability of repayment. During times when the job market is strong and wages are increasing, it is much easier to meet monthly payments – meaning credit scores may be increasing while overall creditworthiness has effectively remained the same.

For people looking to raise their rating, there are a few steps to take that can help. Among them are paying bills on time, being wary of how much credit is utilized and having active older accounts.

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