 TITLE: What Is a Bad Credit History and Rating? CONTENT: What Is Considered a Bad Credit Score and Rating?\n-------------------------------------------------\nTo a certain extent, bad credit is relative. As long as they obey laws forbidding discrimination, lenders get to determine their own lending criteria. Some seek only borrowers with exceptionally good credit ratings, and exclude applicants many others would accept. Other lenders focus on borrowers with less-than-ideal, or \"subprime,\" credit. Still others offer an array of products designed for borrowers with a variety of credit ratings.\nRegardless of their target borrower profiles, many lenders evaluate potential borrowers' credit ratings using credit scores: three-digit numbers derived by performing statistical analysis on the information in your credit report. Credit scores predict how likely you are to fail to repay a loan, with higher scores indicating lower risk that you'll fail to meet your obligations. The most popular scoring systems, the FICO® Score☉ and VantageScore® models, generate scores in the range of 300 to 850.\nLenders often use credit scores as a first step in their lending decision processes, excluding borrowers whose scores fall below a minimum threshold they choose. Lenders often also use credit scores to help set the interest rates they charge borrowers, and may direct applicants whose scores fall in certain ranges to particular products. Riskier borrowers might be offered credit cards with higher interest rates, for instance, while borrowers with the highest credit scores might be offered lower rates and bonus programs.\nFICO assigns ratings to ranges of credit scores according to their relative risk, as seen in the table below. Individual lenders may or may not segment credit applicants using these ranges and categories, and may be willing to extend credit to borrowers in any FICO® Score range from Exceptional to Fair. Some may even offer modest amounts of credit (possibly requiring a security deposit or collateral) to borrowers with scores in lowest range. END