"Bad" credit is usually defined as a credit score under 580. A person with bad credit is considered a risky borrower, usually due to owing large amounts of money or having a history of unpaid bills and debts. Having bad credit can make it hard to get a credit card, mortgage, or other loans, too.
- Previous delinquencies
- High debt balances
- Recent bankruptcies
"Bad" credit is usually indicated by a low credit score—the numerical summary of the information in your credit report. FICO scores are one of the most widely used credit scores. They range from 300 to 850, with higher scores being more desirable.
The FICO credit score range is broken up into five ratings:
- Exceptional: 800 and above
- Very Good: 740-799
- Good: 670-739
- Fair: 580-669
- Poor: Below 580
Your credit score is based on five different factors, each of them weighted differently. All of them can contribute to bad credit.