A credit-score hangover is hitting America's riskiest borrowers

drianna Boshears's dream of homeownership seemed within reach for the first time in 2021. She and her husband Jeffrey were finally saving money, thanks to pandemic stimulus checks and a larger-than-usual tax refund. A real-estate agent suggested they work to boost their low credit scores before applying for a mortgage.

- DAVID UBERTI & KATHERINE HAMILTON

The couple's scores rose after Adrianna opened her first credit card, and then vaulted into the 700s after the couple added four others. But as their savings dwindled, the 41-year-old mom started pulling out the plastic to pay for groceries and utilities. By October, the kitchen cabinets in her Fresno, Calif., apartment were bare. All five cards were maxed out.

Their balances now exceed $10,000. Adrianna's credit score has fallen to 569. There are no more dreams of buying a house.

"I make more money than I did back then, and I'm struggling more now," she said.

Americans' credit scores skyrocketed during the pandemic in an unexpected benefit of the upheaval. Millions are now nursing the financial hangover.

Higher prices and borrowing costs are hurting some of the same consumers whose credit scores were most inflated by an expanded Covid-era safety net. While the share of Americans seen as risky borrowers has dropped, according to credit-scoring firm FICO, the credit scores of this so-called nonprime group have fallen sharply since last year, veering below prepandemic levels. People fell behind on credit-card bills and car payments more often in 2024 than any point since the aftermath of the Great Recession.

The boomerang effect is exposing a weak point in a U.S. economy that has earned widespread discontent in recent years despite muscling ahead of its rich peers.

Credit scores-rankings of consumers' likelihood to repay debts-serve as most Americans' primary gauge of financial health. Their rise during the pandemic fostered hope for young families-of homeownership or new cars. But for those whose incomes haven't kept up with inflation, the normalization of the economy has meant backsliding. Some are now living with loans they wouldn't have been able to otherwise obtain and credit limits lenders wouldn't have typically offered.