And the Wanderers skipper has told his teammates it is essential they avoid another defensive nightmare when they travel to league leaders Chelsea after the international break.
"We started well but gave away a poor goal and that gave Arsenal the emphasis to push the ball around," said Craddock, who managed to grab a late consolation in Saturday evening's mauling.
"But the first 20 minutes was positive until they got sloppy goals which could have been avoided.
"If we'd stopped the first goal it could have been a different game.
"We were trying hard, we were trying to get back into that game but it was difficult.
"We have another massive one coming up against Chelsea so we have to put this behind us and work to the next game.
"We can't worry about the position we're in, we should just keep playing the football.
"We can survive. We have a good bunch of lads who are hard working but we know it's not going to be easy."
Meanwhile David Edwards reckons Arsenal are definite contenders for the title this year after experiencing first-hand the qualities of Arsene Wenger's outfit.
However, despite him describing the Gunners as the best team he has ever faced, the 23-year-old echoed his captain's verdict that Wanderers should have defended better.
Edwards said: "I've played international games and whatever and that's by far the best team I've ever played against.
"They pass and move the ball so well and I am sure that the spectators here at Molineux won't see a better team here this season.
"But as good as they were, we were responsible for our own downfall.
"We should have done better - the goals that cost us were our own fault."