Bad credit is a term used to describe a person's creditworthiness. It is the result of not being able to maintain a consistent and timely payment of your financial obligations, either because of poor financial decisions or other, more difficult, unavoidable life circumstances.

Your credit rating will be a reflection of your behavior in dealing with your lenders and creditors, whether it’s a loan lender, credit card company, or any other financial institution to whom you’re obligated to pay money. Your credit score is calculated using a range from 300 to 850 and is a reflection of your creditworthiness. Generally, a score below 580 is considered to be “bad” or “poor” credit, while a score higher than this is considered “good” or“excellent” credit.

When you have a bad credit score, it can make it difficult to qualify for a loan or get approved for a credit card. Lenders will use your credit score as a gauge of how likely you are to repay any loan amount or credit card balance. So if your score isn't great, it may be difficult to get approved or the terms may not be favorable.

Having bad credit doesn't necessarily mean you will never be able to borrow money or be approved for a loan or credit card. There are options available to help you get back on your feet financially and rebuild your credit. Lenders and credit card companies may offer secured products, which require you to put up money as collateral for a loan or credit card. You can also try to find loan or credit products specifically designed for people with bad credit. Others may also offer loans or credit cards to those with bad credit but with higher interest rates, fees, or other conditions to compensate the lender for the risk they’re taking.

You can also improve your credit score over time by making regular on-time payments to lenders and creditors, and by paying down any outstanding balances. It’s also important to use credit responsibly and stay within your borrowing limits. By taking these steps, you can start to rebuild your credit and create a more favorable credit path for the future.

Bad credit can have a damaging effect on an individual’s financial life, making it hard to access the credit needed for important purchases such as cars or homes. It can also force an individual to pay higher interest rates when borrowing money. To protect against bad credit and its effects, it is important to make responsible financial decisions, try to pay off debt, and keep balances below their credit limits. By doing so, you can remain on track and build your credit up over time.