A low credit rating refers to a poor or subpar score that an individual or business receives on their credit report. This score is calculated based on various factors such as payment history, outstanding debt, length of credit history and types of credit used. A low credit rating indicates that the person has not been managing their finances well and may have difficulty obtaining loans, credit cards or other forms of financing at favorable rates due to being seen as a high risk borrower. It can also affect their ability to rent an apartment, secure a job in certain fields, or even get approved for a mobile phone contract. Improving one's credit rating typically involves paying off outstanding debts, reducing overall debt levels and demonstrating consistent responsible borrowing behavior over time.