Bad Credit

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What is a 'Bad Credit'

A bad credit is a qualification of an individual's credit history that indicates that a borrower carries a higher credit risk. A low credit score indicates bad credit, while a high credit score is an indicator of good credit. Creditors who have lent money to an individual with bad credit face a higher risk of that individual missing payments or defaulting.

BREAKING DOWN 'Bad Credit'

An individual's credit history is dependent on a number of factors, including the amount borrowed, the amount of available credit remaining and the timeliness of payments. An individual may have bad credit if he or she does not make timely payments or has defaulted on a loan during a period of time. Having bad credit makes it more difficult or costly to obtain loans, such as mortgages, from financial institutions.

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RELATED FAQS
  1. What is the difference between bad credit and no credit?

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    Check out the differences between credit score and credit history, and learn how your credit history is used to create your ... Read Answer >>
  3. What are the biggest factors that can affect my credit score?

    A credit score is a numeric expression that helps lenders estimate the risk of extending credit or loaning money to people. ... Read Answer >>
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    Avoid these pitfalls when working with high credit limits, and learn how to increase your credit score by increasing your ... Read Answer >>
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    The manner in which you use your credit cards may affect your credit score more than the number of credit cards you own will. Read Answer >>
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