Is Poor Credit the Same as Bad Credit?

Updated: November 16, 2023 Author:

Quick answer: Yes, the terms ‘poor credit’ and ‘bad credit’ refer to the same thing: essentially a low credit rating.

    Understanding the various pieces of jargon and technical terms around credit scores is important when you want to assess your options. With terms like ‘poor’ credit and ‘bad’ credit seemingly being interchangeable at first glance, we thought it time we got to the bottom of things. It’s the only way to ensure you fully understand your current position and the options at your disposal. 

    What is a credit score?

    First things first, we need to go back to basics and clarify what a credit score is. This three-digit number is used to rate how creditworthy lenders see you as. The higher the number the better your credit score, and the better your credit score the more access you’ll have to financial products. 

    A credit score is a measure of the risk a lender puts themselves at by lending you money (giving you credit). This means that to balance the equation of risk vs reward from their side, they will likely charge those with lower credit scores higher interest. 

    What determines your credit score?

    Your credit score is determined by a variety of different factors. The most commonly discussed contributors to your score are: 

    • Whether you have any outstanding debt in the form of loans and credit cards.
    • How many financial dependents you have who are taken care of by your income. 
    • If you’re on the electoral register and can therefore be readily traced to an address.
    • How timely you have been with repayments in the past and the percentage of your credit you have spent.

    Lenders want to have a complete picture of your financial position so they can create a risk  profile for you. Your credit score is a short and concise way to evaluate you in terms of all of these various factors. 

    Who determines your credit score?

    The UK is served by a range of independent credit reference agencies who are responsible for assessing the credit scores of individuals. They arrive at judgements on your level of creditworthiness and pass this information to lenders who then determine which financial products they’re willing to offer you. 

    Scores are typically placed within bands designed to describe the quality of your rating at a glance. ‘Excellent’, ‘good’, ‘fair’, ‘poor’ and ‘very poor’ are all common designations, but this can also be a source of confusion for many who are looking at credit scores for the first time. 

    Let’s start with Equifax. They rate credit levels from 0-700 and give a ‘bad’ credit score as anything that’s 379 or below. They then break this band up into ‘poor’ (280-379) and ‘very poor’ (less than 279). 

    Then we have Experian who rate credit on a scale from 0-999. They designate 561–720 as ‘poor’ and anything in the range 0–560 as ‘very poor’.

    The UK’s other major ratings agency, Trans Union, uses a scale that ranges from 0-710. Scores that are inside a band of 551-565 are ‘poor’ while anything that’s 550 or below is listed as ‘very poor’.

    Different scales that each produce a three-digit number to rate your creditworthiness can cause confusion. Taking care to note which agency your score has been generated by will ensure you don’t fall foul of a common mistake that could lead you to overestimating or underestimating your credit score. 

    What do ‘poor’ credit and ‘bad’ credit actually mean?

    These two words are commonly used interchangeably with someone who has a ‘poor’ credit score saying to have ‘bad’ credit. While this is true in the sense that no one wants a ‘poor’ score because it will reduce their options for borrowing money, there is a second meaning we need to highlight at this point. 

    A ‘bad’ credit score will often be used as a catchall term for any credit score that is ‘fair’ or below. Why? Because the category above ‘fair’ is ‘good’, the opposite of which is ‘bad’. While this can sound a little too much like semantics when all you want to know is how much money you can borrow, the distinction soon becomes important. 

    Using the above definition of a ‘bad’ credit score we see ‘poor’ credit is just a subcategory. You may have ‘fair’ or ‘very poor’ credit but will still be told you have a ‘bad’ credit score by a rating agency. But there’s another meaning you need to be aware of…

    The full meaning of ‘bad’ credit

    While ‘poor’ credit and ‘poor’ credit score are often used to mean exactly the same thing, you cannot say the same about ‘bad’ credit and ‘bad’ credit score. I appreciate this is getting confusing, which is why it might help to consider the fact that you can have a ‘bad’ credit score and also have ‘bad’ credit.

    The latter arises if you have done any the following: 

    • Made a habit of continually paying your utility or council bills late and receiving written warnings and reminders. 
    • Missed one or more repayments on your credit agreement, such as buying a car on finance or furniture on a pay later scheme. 
    • Amassed a considerable amount of debt on your credit card with no plan in place to pay it off in a timely fashion. 

    While all of these things will likely see you awarded a ‘bad’ credit score, you are also said to have ‘bad’ credit. Not only are you a higher risk individual to lend to, you’re also in debt and typically will have exceeded your agreed credit limits. This is ‘bad’ credit and means that you’ve effectively spent the credit you’re entitled to and have got into further debt. The good news is that all is not lost. 

    Rather than losing sleep over a stressful financial position, or getting overwhelmed by the semantics of industry terms, try to think positively. Your credit score — or credit position in the case of the second meaning of ‘bad’ credit — is not something that will stay the same forever. You might take this to mean that things will only get worse from here, but with the right plan in place, things can also get a whole lot better. 

    How can you improve your credit score?

    Before we get to the ways to improve a ‘bad’ credit situation, we’re going to cover the basics of improving your credit score. This address the ‘poor’ credit component that forms half of this article’s title. 

    Taking action quickly will allow you to start improving your score and is something you can begin today. The three following examples are the best place to start: 

    • Register to vote and check that your details are up to date on the electoral register. This will show lenders you’re easy to trace and that they can put a permanent address to your name.
    • Pay your council tax on time and make sure not to miss any future payments by creating a direct debit. This will make sure the money leaves your current account at the same time each month, giving you one less piece of personal admin to remember. 
    • Move your fixed monthly costs to direct debits wherever possible. The reason for this is that — not only is it a guaranteed way to never miss a payment — it will show ratings agencies you’re reliable and trustworthy.

    While you won’t be able to boost your credit score in a single afternoon with these changes, you will be able to lay more solid foundations. With a consistent and sustainable approach based on sound financial decisions, you’ll be able to fix your ‘poor’ credit issue by improving your score so it is rated as ‘good’ or higher. Once this happens you will no longer have a ‘bad’ credit score. Not only will this reduce your stress levels when you come to borrow money, it will also reduce the level of repayments you’re charged because you’ll qualify for lower interest rates. 

    We now need to turn our attention to the closely related area of ‘bad’ credit and what you can do about it. 

    How can you improve ‘bad’ credit?

    For this section we’re going to put all talk of credit scores to one side and instead focus on clearing debt and repaying overspent credit. This is what we mean by improving ‘bad’ credit. Here are the most common causes of ‘bad’ credit and what you can do to start turning things around: 

    • Exceeding the terms of your credit agreement: Going beyond the limit on a credit card or failing to keep up with previously agreed monthly payments will instantly result in ‘bad’ credit. While the option to simply pay everything off may not be there right now, contacting the credit company should be your first port of call. They will be able to talk you through your options and put in place a plan that will see you make progress one month at a time. 
    • Being declared bankrupt: Bankruptcy hearings can be stressful and in some cases life-changing, resulting in a chain of knock-on events. While you cannot change the fact that you have been declared bankrupt, you can work with lenders to see what options are available to you.
    • Getting stuck on an unsuitable credit card: An unsuitable credit card is any card with a combination of owed balance and monthly interest you cannot afford to repay. Options to solve this issue include speaking to your bank or credit card company to discuss a slower repayment schedule, or to consider a balance transfer. Balance transfers give you the option of moving the amount you owe onto a lower interest card.
    • A County Court Judgement (CCJ) issued in your name: When outstanding debts and loans reach this point it can be a long way back. The key is to look into how long the restrictions caused by the CCJ will take to expire and then focusing on getting the other issues on this list in order. 
    • Having your identity stolen: An increasingly common way for people to run up large amounts of ‘bad’ credit is to unwittingly fall victim to identity theft. Scammers will take out as much easy credit under your name as possible with no intention of ever paying it back. The first time most people are made aware of this is when they’re issued with a bill for an outstanding debt they know nothing about. Changing passwords regularly, never sharing login details and enabling two-factor authentication will help secure your identity online. 
    • Using Individual Voluntary Arrangements: Writing off a large proportion of your debt can help you get back on your feet but will still result in ‘bad’ credit. Using the mechanisms at your disposal and then creating a plan to stay ahead in future will help you turn things around. 
    • Minimum monthly repayments: ‘Bad’ credit can build up when you get into increasing levels of debt and also when you pay back your debt at the slowest possible rate. If at all possible, look to exceed the monthly minimum payments to save yourself interest and to reduce your ‘bad’ credit.

    While it will take time to recover your financial situation, making a start is truly important. By taking action as soon as possible you can work with your lenders to create a plan to get back to where you want to be. 


    ‘Poor’ credit means the same things as a ‘poor’ credit score and shows lenders how creditworthy you are. A ‘bad’ credit score is anything rated ‘fair’, ‘poor’ or ‘very poor’ and is often shortened to ‘bad’ credit. The problem with this is that there is a second meaning of ‘bad’ credit which relates specifically to the money you owe — not the level of your credit score. 

    You can improve your credit score and escape the trap of living with ‘bad’ credit by taking action today. Suitable starting points have been outlined above, and because we’re a comparison site dedicated to people with ‘bad’ credit, we can also introduce you to other options. 

    Our experts may be able to help you find a more suitable credit card, flexible car financing options and even a loan if you need an injection of capital. The key is to take action quickly so you can create a plan that gets you back to where you want to be financially.