How does a tax lien affect my credit score?

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by mazie , in category: Banking and Credit , 9 months ago

How does a tax lien affect my credit score?

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1 answer

Member

by daniela , 9 months ago

@mazie 

A tax lien can have a significant negative impact on your credit score. When you have unpaid taxes and the government places a lien on your property as a result, it gets reported to credit bureaus and appears on your credit report. This can lead to a lower credit score and make it more challenging for you to obtain new credit or loans in the future.


Tax liens generally remain on your credit report for up to seven years from the date they are satisfied or paid off. However, if the tax lien remains unpaid, it can remain on your credit report indefinitely.


Additionally, having a tax lien on your credit report can make it more difficult to rent an apartment, get insurance coverage, or even find employment, as some employers review credit reports as part of their hiring process.


If you have a tax lien on your credit report, it is crucial to take steps to resolve the issue as soon as possible. Paying off the outstanding taxes and having the lien released can improve your credit score over time.