What Is A Bad Credit Score?

Bad credit and how you can help avoid it

What is (and what isn't) bad credit?

Your credit score helps lenders decide whether to lend you money for things like mortgages, loans and credit cards. But your score depends on if you have ‘good credit’ or ‘bad credit’.

You can get bad credit when you’re unable to keep up with payments, regularly pay late or don’t keep to your credit agreement. This could lower your credit score and makes it harder to get accepted for credit in future. 

You could maintain your credit score by sticking to your credit agreement and managing your finances well. This means always paying on time, paying at least the minimum amount and staying within your credit limit.

Causes of bad credit

  • Paying less than your minimum monthly payment amount
  • Making monthly payments late or missing them completely
  • Going over your credit limit
  • Not clearing any debts

How could bad credit affect you?

  • Your credit score is impacted negatively
  • Becomes harder to get access to credit and you may only be eligible for cards that often have a higher APR
  • You could incur default fees 

What you can do to improve your credit rating

  • Pay at least your minimum monthly payment amount
  • Pay on time and never miss a payment
  • Stay within your credit limit, this is the maximum amount of credit available to you. Your ‘available credit’ is your credit limit minus any outstanding balance on your card 
  • Clear debt quickly –  County Court Judgments or defaults for example 

How could good credit benefit you?

  • You’ll have a healthy credit score
  • Makes it easier to get accepted for credit and you’re more likely to be eligible for promotional offers e.g. longer 0% balance transfer deals 
  • Managing your account well means you won’t incur any  default fees

Things you can do if you’re worried about bad credit

It might be better than you think and you’ll be able to see how much work you need to put in to improving it. You should also check that your details are correct with the Credit Reference Agencies as this can affect your credit score.

Try Experian .

Don’t just apply for credit – see if you’ve got a chance of being accepted first. Regularly applying for credit and getting turned down affects your credit score.
 
If you’re thinking of applying for a Barclaycard and are concerned about your credit history, we’d recommend using our eligibility checker  with no harm to your credit rating.  

When you’re facing missed payments, it may be tempting to just wait and see if your finances improve or consider a debt management company. However, both these options may worsen your situation and could damage your credit rating.
 
The Money Advice Service
Citizen's Advice Bureau
Step Change Debt Charity
The National Debtline
 
 
You can also find out more by visiting our Money worries  hub.