This is a very hot topic of discussion in the world of credit cards. It starts with what leads to a good or a bad credit and goes on to talk about the importance of good/bad credit.

Have you been defaulting on your credit card payments thinking that it doesn't matter much? Well you haven't been doing well to start with. Besides the late fees and the interest charges, there is something else which the credit card companies keep track of and that is Credit Rating. Though a bad rating looks harmless in the first instance, it can actually get you into difficult situations. These credit ratings are consolidated at credit bureaus and are available on request.

This is the meter by which every financial institution gauges an individual's credit worthiness before qualifying them as eligible for credit. A bad credit rating can lead to rejection of car loan or a home mortgage application whereas a good credit rating can not only expedite the process but also get you a good deal and give you more bargaining power, after all the financial institutions too want to transact with the least risky people. In fact, credit cards are a good and easy way of establish your credit worthiness in the market and aid you in various monetary transactions. A good credit rating can help you get a leased accommodation on a preference basis as compared to those who have no or a bad credit rating.

What's more, sometimes a good credit rating is treated as a measure of how responsible a person you are and used by employers as an input to deciding the right candidate for a job. So though a good credit rating might not improve your chances of getting a good job, a bad one can surely scale down your chances. You can't possibly get another credit card if you don't have a good credit rating.

Having established the fact that getting a good credit rating is not good to have but must to have, let's now check the leading factors that give you a bad credit rating:

1. Regularly (more than once or twice) missing the due date of monthly installment payment for a loan or home mortgage.

2. Altogether non-payment of borrowed money.

3. Applying for too many credit cards at once. If you haven't been taking care of your credit ratings till now, it's about time that you started giving it its due.

If you are not sure if you have already damaged your credit rating or not, you can get a credit report from the credit bureau in your country and check your current rating for yourselves (e.g. three major US credit bureaus are Experian, Equifax and TransUnion). If you find that your credit report has errors you can contest the same and get it corrected. If your credit rating is spoilt due to negligence on your part, you can still take measures to improve it. Though it can't happen overnight, you can surely improve your credit rating over a period of time. You might also seek professional help if you don't feel sure about how to deal with a particular situation.