One measure of Americans’ financial health has remained surprisingly steady during the economic downturn: the consumer credit score. As explained in Components of your FICO credit score, this score is used by banks and lenders to determine how much credit to extend to borrowers, and under what terms.

That is beginning to change, for a variety of reasons that have nothing to do with how you handle your personal finances or whether or not you’ve been responsible in maintaining your credit payments.

Banks and lenders are closing a record number of credit card accounts and reducing millions of dollars in credit lines. This results in consumer credit scores being reduced because of the diminishing credit lines. The domino effect continues, with individuals with formerly good credit scores being denied credit because of the reduced score, further reducing the score and hampering the ability to obtain credit from other lenders. The cascade effect continues, affecting such things as car insurance, where a consumer’s credit score is used to determine rates; and possibly affecting employment.

This raises a question about flaws in the consumer credit rating system. Consumers are seeing their FICO scores drop through no fault of their own.

Most likely, Fair Isaac will be watching to see how the economic downturn affects credit scores but it isn’t likely any changes will be made in the immediate future. Lenders, and others who utilize the scores to make financial decisions, may have to take a look at other economic indicators and place less emphasis on the FICO score.

CreditCheckFacts will continue to monitor the situation and report back.