Do Tax Liens Affect Your Credit Score? – Meaning Of Tax Lien
Taxpayers in the U.S. who are currently dealing with an unpaid tax lien could be wondering whether they could manage to remove it from their credit report.
When you refuse or disregard paying a tax debt, the government will have a legal claim against your property, which is called or known as a federal tax lien. The government’s interest in everything of your possessions, including real land, personal property, and financial assets, is safeguarded by the lien.
According to a published post by Marca, you should remember that tax liens can no longer affect your credit. This used to be the case before 2017 when the credit bureaus allegedly announced their decision to have all tax liens from credit reports removed.
There are several disadvantages to having a tax lien even though it won’t have any effect on your credit score. A tax lien can affect your financial situation even if it is not reported to credit bureaus. You should, therefore, make prompt payment of any tax payments and do everything to avoid tax liens.
Does the Tax Lien Have any Effect or Affect Your Credit Score?
Any current tax liens shouldn’t be listed on your credit report anymore as the three credit bureaus started removing them from credit reports in 2017. This applies to all tax liens, those filed before 2017 and those filed after the year.
A tax lien used to be regarded as a negative mark on your credit. If you paid off these liens, they could continue to exist on your credit record for up to seven years. In the event you haven’t done so, they would be there for approximately ten years.
To get released tax liens removed from your credit report, you must send notifications to the appropriate credit bureau of the inaccuracy.
All three credit bureaus – Experian, Equifax, and TransUnion – offer simple dispute procedures online.
In most cases, reporting that there is a tax lien on your credit report will only take a few minutes. Even even though many credit report disputes are resolved quickly, the credit bureaus have 30 days to respond to the dispute and remedy any inaccuracies.