Will debt collectors force Michael Jackson to beat it?
According to court papers filed this week, Jackson must pay the balance of a $24 million loan, or the Neverland Ranch, his 2,800 acre playground located northwest of Santa Barbara, Ca., will go up for auction on March 19. A source close to Jackson responded to the filing, and told CNN that the self-proclaimed “King of Pop” will fight to keep Neverland. "The financing is all being worked out," the source said. "The real estate market is very bad right now and Jackson is being affected just like many other Americans."
Certainly many other Americans are facing foreclosures and even bankruptcies. But very few of them have Arabian royalty willing to bail them out (like maybe, just maybe, Mike does). When faced with financial chaos, the best first step is to get a grip on your credit score.
Your credit score says a lot about you. Employers, landlords, and lenders have access to your rating. Having a great score is important if you ever need a loan, especially for a house or car. A low credit score means you will pay higher interest rates, often 20% or more, when you borrow money.
To check on your credit score visit www.annualcreditreport.com. There are three types of credit reports to choose from: Experian (EXPN), TransUnion and EquiFax (EFX). By law you are allowed one free copy from each bureau a year. “You should get a credit report every four months,” says Morris Armstrong, a financial planner in Danbury, Conn. “You want to check your accounts for accuracy and [to see] if other people are opening accounts in your name.”
If all is clear, a perfect credit score is 850. However, according to Cary Carbonaro, a financial planner with Family Financial Research in New York, the national average is 692. “760-850 are great scores and 500-579 are low scores,” says Carol Friedhoff a financial planner with Savvy Outcomes, Inc.
Once you know your score, your task it to keep it as high as possible. “The worst way to ruin your credit is with late payments," says Lauren Lindsay of Personal Financial Advisors, in Covington, La. “A late payment, whether it is a day late or a month late, is a late payment, and can drop your score 100 points. Paying on time is the best way to rebuild your credit.”
If your score is low, begin reestablishing your credit right away, because credit bureaus keep your negative information for seven years, says Armstrong. A good first step is to apply for a secured credit card. “Get a prepaid secured credit card where you open it with $1000 deposit with the bank," says Armstrong. "They will give you a line of credit as long as you leave that money in the account. But you have to make small charges and keep the payments going in full and on time.” Indeed, with credit timing is everything. Listening, Michael?