Bad credit is a term used to describe a person's poor or low credit score. A low credit score may be the result of financial difficulties in the past, such as late payments or defaults on loans. It can also be the result of never having taken out a loan before. A bad credit score can make it difficult to get approved for new loans, credit cards, and other forms of borrowing. It can also lead to higher interest rates and fees. See what a good credit score is.