what is bad credit 
bad credit refers to a person s history of not paying bills on time and the likelihood that they will fail to make timely payments in the future for individuals it is often reflected in a low credit score businesses can also have bad credit having bad credit makes it difficult to borrow money especially at competitive interest rates understanding bad creditmost americans who have ever borrowed money or signed up for a credit card will have a credit file at one or more of the three major credit bureaus equifax experian and transunion the information in those files including how much money they owe and whether they have paid their bills on time is used to compute their credit score a number that s intended as a guide to their creditworthiness the most common credit score in the united states is the fico score named for the former fair isaac corp which devised it a fico score is made up of five major elements assigned different weights 1examples of bad creditfico scores range from 300 to 850 and borrowers with scores of 579 or lower are generally considered to have bad credit according to experian about 62 of people with scores at or below 579 are likely to become seriously delinquent on their loans in the future making them poor risks for lenders 3scores from 580 to 669 are labeled as fair these borrowers are substantially less likely to become seriously delinquent on loans making them much less risky to lend to than those with bad credit scores however even borrowers within this range may be forced to pay higher interest rates or have trouble securing loans at all compared with borrowers who are closer to that top 850 mark 4