What is a Bad Credit?



Bad credit is the equivalent to bad credit score or poor credit rating. This score reveals that a person has been extremely neglectful of his financial obligations in the past. It is bad because it shows the borrower’s bad repayment behaviour. Lending firms use credit score to decide whether the application for a credit card, vehicle loan or mortgage should be granted or discarded. Aside from delinquency and tardiness in terms of making repayments, applying for multiple credit cards and loan transactions could drastically worsen credit score. Nearly every deal that the borrower engages in will be imprinted in his credit history. Thus, lenders will have something to use when evaluating the credibility of the borrower to be extended a loan. Consequently, borrowers with bad credit would need to scout for lenders who can give them another shot at restoring or repairing their poor credit rating.


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