What does bad credit mean?

"Bad credit" generally describes a credit score toward the lower end of the common scoring ranges, though exact thresholds vary by scoring model and by lender. It usually reflects some combination of missed or late payments, high balances relative to available credit, a short credit history, or past delinquencies.

What commonly factors into a credit score

• Payment history — whether you've paid on time.
• Credit utilization — how much of your available credit you're using.
• Length of credit history — how long your accounts have been open.
• Credit mix — the variety of credit types you've managed.
• New credit — how many accounts or inquiries you've had recently.

What a lower score means practically

It doesn't close every door, but it can affect which providers are willing to approve your application, and the terms — often a higher APR or smaller available amount — that they're willing to offer. See our bad credit options page for more on how providers typically approach this.

Steps that can help over time

• Making payments on time, every time, on any active credit accounts.
• Keeping balances well below your available credit limits.
• Checking your credit report periodically for errors and disputing any you find.
• Avoiding opening several new credit accounts in a short period.