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The 1% Versus The 99%: Who Has Better Credit?

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As Occupy Wall Street focuses much of its agenda around the financial health of America, we took a look at the personal side of financial health for both sides of the 1 percent and the 99 percent.

Occupy Wall Street highlights grievances on the growing wealth gap between the top 1 percent of American households, those who made at least $344,000 in 2009, and the 99 percent, which represents the rest of America. The top 1 percent had an average of 225 times the wealth of the average median household in 2009, a figure was just 125 in 1962. And there's another financial gap to pay attention to.

Taking CreditKarma.com's raw data, we took a look at credit and debt statistics of those likely to be in the 1 percent versus those in the 99 percent.

The average credit score of the 1 percent is 704, while the average credit score of the 99 percent is 637. That 67 point difference isn't peanuts. It's the difference between approval and denial on a loan or credit card, which also translates to better access to financial products versus being limited in financial options.

Furthermore, the average 1 percenter has significantly more debt than the average 99 percenter, a difference of $124,000 in average total debt including mortgage, student loan, auto loan and credit card debt. For example, the average 1 percenter has nearly $154,000 in open mortgage debt and $11,300 in credit card debt, while the average 99 percenter has $51,000 in open mortgage debt and $6,200 in credit card debt. Excess debt can be detrimental to credit scores, yet while the average 1 percenter carries significant debt on multiple credit lines, their average credit score seems to reflect a well-balanced, well-managed credit portfolio.

However, another twist to the story is that the 1 percent, by virtue of having significant debt, is also more dependent on the credit system than the 99 percent, from the credit card issuers carrying their $11,000 balance month to month to the lenders backing mortgages worth hundreds of thousands of dollars.

So why does the average 1 percenter have better credit than the average 99 percenter?

It's simple: better credit habits. Let's dig deeper into a slice of data.

1 percenters have an average of 0.47 accounts in collection, while the average 99 percenter has nearly four times that with an average of 2.31 accounts in collection. Accounts in collection, and other derogatory marks, have a significant impact on credit health and significantly drag down credit scores.

It's important to note here that income and wealth aren't factors of a good credit score. Having extra zeroes in your paycheck doesn't equate to creditworthiness; just ask bankrupt, broke celebrities. While the average 1 percenter may have more money with which to acquire a mortgage, loans, and credit cards, how you manage your credit has a bigger impact on your credit score than how much credit you have. In fact, you can build excellent credit by responsibly managing a single credit card and perhaps a loan or two.

Perhaps this "credit health gap" won't be on the Occupy Wall Street's agenda anytime soon, but it's an issue that every American in the 1 percent and the 99 percent will confront as we approach a changing financial landscape in which access to financial products and services may shift in unexpected ways. In fact, most consumers have much work to do on their credit score; a 720 is the credit score needed to access the best rates on credit cards and loans, and many consumers in the 1 percent and 99 percent alike are falling short.

If you're interested in finding out whether your credit score is closer to the 1 percent or 99 percent, check out this calculator that tells you what percent you are, then check your credit score for free at CreditKarma.com.

Where do you fall in the credit health gap?

Justine Rivero is the Credit Advisor for CreditKarma.com, a free credit management website that helps nearly 3.5 million consumers access their truly free credit score.