460 Credit Score: Is it Good or Bad?

So, you’ve checked your credit score and it is 460. But what does that mean? Is that a good score or could it hold you back? We take a look at a credit score of 460, and reveal what it could potentially mean for you when applying for credit.

What does a credit score of 460 mean?

According to credit rating bureau Equifax, which powers Canstar’s credit score tool, if you’ve checked your score and have a rating of 460, that means you have an Average credit score.

The ‘Average’ credit score band sits towards the bottom of Equifax’s scale – above the ‘Below Average’ band, but below the ‘Good’, ‘Very Good’ and ‘Excellent’ bands.

The other two credit bureaus that operate in Australia, Experian and Illion, have their own credit score scale and bands.

What does an Average credit score mean?

Equifax’s data shows that people who score in the ‘Average’ band are likely to incur an adverse credit event in the next 12 months. These adverse events can include a default (a failure to make required repayments on a debt), court judgement (a court decision that you owe money to a creditor) or a bankruptcy.

Credit scores of 460-660 are considered to be in the Average band.

Is a credit score of 460 good or bad?

A credit score of 460 would put you on the lower end of Equifax’s credit rating scale, and indicates that you may be likely to experience an adverse credit event in the next 12 months. This means that lenders may consider you riskier than borrowers in the ‘Good’ band and above.

When it comes to credit scores, the general rule is that the higher your score, the more favourably lenders will look upon you. In 2022, the average Australian credit score was 846, which is in the ‘Very Good’ band.

A credit score of 460 puts you in one of the lower bands of Equifax’s credit ratings, meaning that lenders may view you as a financial risk. This may be reflected in the interest rates they offer you, or the amount they are willing to lend.

If you plan on applying for a credit product such as a credit card, personal loan or home loan in future, then the good news is that there are a number of ways you can improve your credit score. It is important to keep in mind, though, that all of these will take time and discipline.

It’s also important to keep in mind that your age can play a part in your credit score, and that the older you are, the more likely you might be to have a good one. Equifax data shows that, when looking at the average credit scores of people in different age groups, younger people tend to have a lower credit score than older people. For example, the average credit score of someone aged 18-24 was 665, while those aged 25-39 had an average credit score of 796 and those aged 40-54 had an average score of 868.

Learn more: What do lenders look for in a borrower?

What can you do with a credit score of 460?

If you have an Average credit score, then you may still be able to successfully apply for credit products such as loans. However, if you have a credit score of 460, this means that lenders likely already see you as a risky prospect, and you may want to think carefully about applying for a credit product that could put you into further debt.  There are some lenders who offer products specifically designed for borrowers with lower credit scores, who may find it difficult being approved for regular loans. If you want to know more, Canstar has information about getting a credit card with bad credit , getting a home loan with bad credit and getting a car loan with bad credit.

That said, Canstar finance expert Steve Mickenbecker cautions against taking out these kinds of loans if your credit score is already low. “Don’t jump from the frying pan into the fire,” he says, adding that bad credit loans will typically have higher interest rates than other kinds, and that taking on a high rate loan could ultimately just aggravate your existing financial problems.

Learn more:
What is a good credit score?
What is a bad credit score?

What factors affect your credit score?

Credit scores can go up, or down, over time, as scores are recalculated frequently by credit agencies as new information is lodged on your credit history. Some of the most common factors that can affect your credit score are:

• Your repayment history (making loan or credit repayments and paying bills).
• The number of credit applications or enquiries you have made.
• Negative information such as defaults (where you fail to pay back a debt), bankruptcies and court judgements against you.
• Personal details like your age and how long you’ve been at your current job and residential address.
• How far back your credit history goes – generally it begins the first time you apply for credit.

It’s worth noting that since Comprehensive Credit Reporting was introduced, lenders see some of your positive financial behaviours on your credit report, such as when you make loan repayments on time. This is designed to give lenders a fuller picture of your credit history.

Learn more: How is your credit score calculated?

How can you improve a credit score of 460?

If you want to improve your score, there are a few things that you could try. However, the most reliable way to improve your score is to develop healthy financial habits. It may take time and discipline, but it is possible to improve an Average credit score and get it to the range where lenders may consider you less risky, and may therefore be comfortable loaning you more money at more favourable rates.

Some things you can do to improve your credit score include:

• Pay loans and debts on time.
• Pay bills on time.
• Carefully consider the need to apply for further credit products.
• Contact your credit provider or a financial counsellor if you need help.
• Keep credit cards only if you can manage them and pay them off.
• Lower the limit on any credit cards you have.

It may also be a good idea to examine your credit report in detail. A credit report is what your credit score is based on. Look for such things as:

• Inaccuracies in the loans that you currently have, such as mistakes in amounts or types of credit that you currently hold.
• Applications that you didn’t make. This could be simply a mistake or, more troubling, a sign that someone may be using your identity to take out loans.
• Opportunities to improve your credit, such as reducing the credit limit of credit cards.
• When negative credit events will expire (at which point they will be removed from your credit history).

If you notice any mistakes on your credit report, you can contact the issuing credit bureau to request a correction. However, keep in mind that there is no ‘instant fix’ that will improve your score overnight, it could take some time for the changes to take effect.

Plus, It could also be a good idea to check your credit score and report from time to time. Generally speaking, most lenders in Australia will report monthly to credit agencies.

Learn more: How to improve your credit score.

Learn more about your credit score

What is a credit score?

A credit score is a rating that shows how risky a credit bureau believes you to be when it comes to borrowing (and paying back) money. It’s a number that companies, including financial institutions, typically look at when they are deciding to do business with you, such as when assessing a loan application. Credit bureaus, including Equifax, calculate your credit score by taking into account anything recorded on your credit history.

Your credit history is a record of your financial footprint, such as how many credit cards you may have, what your repayment history is like, or if you have a home loan. It typically also includes any applications for credit, regardless of whether or not you were approved for that credit.

Check your credit score for free with Canstar.

What are the credit score bands?

Credit scores grouped into ‘bands’, based on that population-level data.

Below Average
Credit score of 0 (or below) to 459

Equifax says scores in this range belong to people who are more likely than consumers in the higher ranges to experience an adverse event such as default, bankruptcy or court judgement in the next 12 months. (Canstar’s credit score tool’s scale starts at 0, so any negative scores are expressed as 0.)

Average
Credit score of 460 to 660

If you score in this range, Equifax data shows it is likely you’ll incur an adverse event such as a default, bankruptcy or a court judgement in the next 12 months.

Good
Credit score of 661-734

Equifax’s data shows people who score in this range are more likely than consumers who score in the lower ranges to keep a clean credit report in the next 12 months, and are less likely to experience an adverse event during this period.

Very Good
Credit score of 735-852

Equifax’s data shows people who score in this range are twice as likely as the average Equifax credit report holder to keep a clean credit record over the next 12 months, and are unlikely to incur an adverse event during this time.

Excellent
Credit score of 853-1200

Equifax’s data shows people who score in this range are in the top 20% of Australian consumers with an Equifax credit report and are highly unlikely to experience an adverse event that will harm their credit score in the next 12 months.

Further reading

How often do credit scores update?

What credit score do I need for a home loan?

What is a good credit score in Australia?

Check your credit score for free with Canstar.

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