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Jacko’s Credit Score Released

By Sally Maison
Published: Sunday, September 6th, 2009

After the court ruled Michael Jackson’s death as homicide, shocking information about the late superstar was revealed: his credit score. TMZ, a celebrity news website run by Time Warner, recently released Jackson’s credit score for 2007. Rumors that Jackson was in bad credit shape were verified after his score was revealed: 563.67. This is way lower than the average national credit score which is 680. Anyone with this credit score, financial specialists say; is at a high credit risk.

INGMRF-00136099-001TMZ came up with the figures after getting Jackson’s score from the three major credit bureaus: Equifax, Experian, and TransUnion. They computed the average and found out that his score or rating is 136 points short of the “good” credit score, which is 700. Fair Isaac Company (FICO) says that anyone who has a score below 660 is a “sub-prime borrower.”

A sub-prime borrower is someone who has a bad credit history. A person who applies for credit under this category will most likely be rejected. If he does get a loan, he will be charged higher interest rates than normal. People who habitually make late payments and who have high loan default rate eventually end up being sub-prime borrowers. This is the case for the late King of Pop.

While millions of people idolize Jacko, financial specialists say that they should not follow his credit practices. Experts enumerate the typical causes for having a bad score or rating, things that Michael Jackson may have done:

• Two or more 30-day delinquency in the last 12 months or one 60-day delinquent Payment in
• The last 24 months

Charge-off or foreclosure in the last 24 months
• A bankruptcy filed within the last 60 months
• Debt-to-income ratio which is 50 per cent or greater

While scores can still be fixed, it is best to avoid having a bad one. Cancelling a credit card, especially one which has an excellent payment history, can hurt a score. Using up more than 30% of one’s limit is another no-no. Consolidating accounts will also hurt a financial score. It is a practice of many consumers to transfer all card balances into one account, thinking that dealing with only one bill each month will make life easier for them. However, they do not realize that one huge balance is worse than having multiple low-balance accounts. The best that consumers can do is to keep all their accounts and pay them promptly. They should also avoid using their credit cards. Times are getting tougher, even for the superstars, but experts say that consumers can get good score if they keep on searching for ways to do so.

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