New York CNN  —  Even as unemployment remains historically low and recession fears fade, consumer credit scores are starting to buckle. The national average FICO score dipped to 717 as of October, down from 718 in July, according to data released Wednesday by FICO, an analytics company that evaluates the strength of borrowers. Although FICO scores remain near record highs — and well above pre-pandemic levels — this marks the first drop in a decade. It’s another sign that at least some Americans are feeling financial stress. The cost of living remains high and the Federal Reserve’s inflation-fighting medicine — high interest rates — is adding to the pressure. “The effects of high interest rates and persistent inflation may be starting to weigh on consumers, especially those already struggling to manage their finances,” Can Arkali, FICO’s senior director of scores and predictive analytics, wrote in the report. The CFPB announced that it will close a loophole that costs Americans more than $14 billion per year in late fees on their credit cards. D3sign/Moment RF/Getty Images Related article Opinion: Finally, a long-overdue change to credit card late fees FICO said the one-point drop in credit scores in late 2023 was driven by an increase in Americans missing payments and also by rising debt levels. The last time credit scores fell was between April and October 2013, when the average FICO score dropped by two points, to 690. Credit scores have steadily increased since then — even during the turmoil of the Covid-19 pandemic. Although job loss spiked during Covid, stimulus checks and forbearance from banks and credit card companies helped many consumers avoid financial trouble. Ethan Dornhelm, vice president of FICO scores and predictive analytics, told CNN that this is an indicator that should be watched closely over the coming quarters. However, he said this one-point drop in credit scores is not necessarily a red flag. “While this is a notable milestone, it’s not a drastic decrease and not one that should sound an alarm,” he said. ‘Financial strain’ US credit card debt climbed to a fresh record high of $1.1 trillion in December, according to the New York Fed. As of October, just over 18% of the population had a 30-day or worse past-due payment on at least one credit account in the prior year, according to FICO. That’s up by 4% from April. “The apparent cumulative impact of higher interest rates, elevated consumer prices and economic uncertainty has put a financial strain especially on those consumers who heavily rely on credit cards to cover everyday expenses,” Arkali said. When consumers fail to repay their loans for a long time, banks write off the bad debt as a loss. Banks have increasingly been forced to do just that. The net charge-off rate on credit card loans climbed to 4.15% at the end of last year — the highest since early 2012, the Federal Deposit Insurance Corporation said Thursday. ‘Not terribly concerning’ Consumers continue to prioritize paying their mortgage and car loans. FICO said that while missed payments on mortgages and auto loans are still below pre-pandemic levels, missed payments on bank cards are now above pre-pandemic levels. The NY Fed recently found that credit card and auto loan delinquencies have climbed to the highest level in more than a decade, signaling “increased financial stress, especially among younger and lower-income households.” shapecharge/E+/Getty Images Related article Americans have racked up a trillion dollars in credit card debt. That’s actually OK “There are some households that are under stress,” said Gus Faucher, PNC’s chief economist. “Inflation has hit lower-income households harder, and many of them have spent down their stimulus savings.” Still, Faucher said it’s “not terribly concerning” or surprising that FICO scores have dipped, because they were at record highs in 2022 when job growth was surging and consumers were flush with cash. The PNC economist pointed to a range of positive forces that should help American consumer balance sheets: Historically low debt burdens, a strong job market, rising household wealth thanks to booming home and stock prices and the fact that paychecks are growing faster than prices. “The overall outlook for consumer credit quality, and consumer spending growth,” Faucher said, “is still very solid.”