Bad Credit


DEFINITION of 'Bad Credit'

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.


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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.

  1. Credit Rating

    An assessment of the credit worthiness of a borrower in general ...
  2. Credit Report

    A detailed report of an individual's credit history prepared ...
  3. Identity Theft

    The crime of obtaining the personal or financial information ...
  4. Credit Risk

    The risk of loss of principal or loss of a financial reward stemming ...
  5. FICO Score

    A type of credit score that makes up a substantial portion of ...
  6. Jamming

    A scam perpetrated by bogus credit repair firms that involves ...
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  1. How can I improve my credit score?

    If you are looking to take out a loan or apply for a credit card, then it will be very important for you to have a good credit ... Read Full Answer >>
  2. Does marrying someone with bad credit affect my credit score?

    A credit rating is an assessment of an individual's creditworthiness. This evaluation is based on an individual's history ... Read Full Answer >>
  3. How many free credit reports can you get per year?

    Individuals with valid Social Security numbers are permitted to receive up to three credit reports every 12 months rather ... Read Full Answer >>
  4. Is it possible to get a free credit report from Equifax?

    It is possible to get a free credit report from Equifax, as well as the other two major credit bureaus, Experian and TransUnion. ... Read Full Answer >>
  5. Do free credit reports affect your credit score?

    Free credit reports do not impact your credit score. Credit inquiries are divided into two categories: soft inquiries and ... Read Full Answer >>
  6. Does a free credit report show your credit score?

    The free credit reports available from the three credit reporting agencies do not include your credit score. Under the 2 ... Read Full Answer >>

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