Why is my bit getting rust on it?

Sweet iron mouthpieces are made to rust. A little surface rust promotes a sweet taste for your horse, which encourages salivation and a softer mouth. 

Some steel shanks (i.e., brown or black steel) may develop surface rust, depending on their finish and the environment (humidity levels, sweat, and storage conditions). 

You can wipe a small amount of olive oil to help condition your bit shanks, however, steel will naturally rust — that's just the nature of the metal.