Bad Credit

When a person or individual has bad credit it means there is some doubt over their ability to repay a debt or obligation, usually because they have missed payments or defaulted at some time in the past. This makes it hard for them to obtain credit in the future as prospective lenders are nervous about losing the money they might lend to that person or company if they should default again. Whilst it is true that anybody could potentially default, including those who never have before, the ones who have already will be metaphorically tarred with the "they have once so they are more likely to again" brush. However unfair this may seem, it is unfortunately a reality.

Many lenders today rely on automated credit checks to see the current status or credit score of a potential borrower. This adds to the difficulty of those with a poor credit history as it a mathematical number which does not take into consideration the particular circumstances of the person or company as to why they were unable to keep up repayments previously. For those in this position it can be hard or even impossible to take out a loan or credit card.

But those who have a bad credit rating may still be able to borrow in the future. There are many companies who offer loans for people with bad credit and credit cards for bad credit. It will usually be a smaller amount and at a higher rate of interest than may be offered to someone with a good credit history, but it is still something, and can often be used as a start to rebuild and repair a poor credit rating.