The most common way bad credit is caused is when people do not pay debts that they have accrued based on the payment schedule that has been set up, in a timely fashion. Whether it is a home mortgage, car loan, student loan, credit card or any number of various debts that individuals may have, if payments are made past the due date, it may cause the individual to get a bad notation on their credit scores. It is basically up to the company that holds the debt to report the late payment to the credit bureas. Many lenders, and/or companies that hold notes that are on larger assets (your home mortgage and possibly your car loan) may have what is called a grace period of a certain number of days after the due date for your payment to arrive. If your payment gets to them within that grace period then you would be considered basically paying within their acceptable window of time. Even one late payment can cause a negative hit to your credit score.
In addition to late payments, having extremely high balances on credit cards near the limit can cause your credit score to be negatively impacted. In addition, if you apply for too many credit cards and/or loans within a short period of time this too can negatively affect your score.
Once you have established credit, the longer you have an established credit history, the easier it is maintain your scores and also repair your scores if you have had a slip up.
In addition to late payments and mismanagement of credit cards and loans, any foreclosure and/or bankruptcy will negatively affect your credit score and can take a long time to repair.
It is important to establish credit, and once established the main thing is to make sure to protect your credit score by making payments on time and properly managing your credit amounts.