Bad credit is normally treated as a bad sign because, for many people, it's the result of carelessness with finances. Maybe you overspent and maxed out a credit card, or maybe you decided you weren't going to pay something for whatever reason. But for many people, the road to that bad credit involved some bad decisions. So, lenders are wary of bad credit because it indicates, for many borrowers, that the borrowers are risky -- they might not be able or willing to pay back the loan. Unfortunately, this reputation affects even those whose bad credit is due to extenuating circumstances.