The national average credit score among consumers currently stands at 717. Last year, it was 718 and 716 in 2022, according to FICO.

"The one-point drop in the average credit score of credit union borrowers in each of the last two years is likely driven by increases in missed payments and rising consumer debt levels," Tommy Lee, senior director for analytics and scores at FICO, wrote in a blog post. "Missed payments have increased year-over-year and are at pre-pandemic levels. The percentage of credit union borrowers with a severe 90+ day delinquency in the last six months increased year-over-year, from 6.5% in January 2023, to 7.6% in January 2024. This is slightly higher than 7.5% as of January 2020."

Lee also noted that in recent years, the aggregate credit union borrower population has seen a steady increase in default rates and consumer debt, which also contributed to a one-point drop in the national average credit score in 2023 and 2024.

New credit activity has also slowed down.

"As of January 2024, 56% of the credit union population has opened at least one new credit account of any type in the past year," Lee wrote. "This is down from 60% as of January 2023 and January 2020. This decrease could be attributable to higher interest rates making it less appealing to open new accounts."

Nevertheless, credit unions have fewer high-risk borrowers in their portfolios because only 13% of the credit union population has a credit score below 600 while 17% of the total population credit score is less than 600, according to FICO.