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A tax lien is essentially a governmental right to your property if you fail to pay income or property taxes in a given year. This type of imposition can put a major dent into your credit score and cause a lot of burden on your ability to get loans in the future. Getting a tax lien removed from your credit report can be a lengthy and tough process. Because it has been imposed by the government, it is easily traceable and therefore hard to dispute.
The truth of tax liens is that they will be on your credit report for seven years before being removed. You can contact the IRS for more detailed information on your particular tax lien. It is vital to pay taxes to avoid this type of stress on your credit score. Although time will remove it, you will still have to deal with it for seven years before you can even get a home or car loan for a normal interest rate and small down payment.
Bad News
A tax lien is bad news for your credit score. About the only thing that looks worse on your credit score is a bankruptcy. The IRS has basically stated that you have evaded your taxes and you then become a major lending risk. Here are a few ways to go about getting a tax lien removed from your credit report:
- You can wait out your lean, but it will take seven years for it to be removed from your credit report.
- Pay the taxes. If you pay off the tax lien it can be removed from your credit report in up 30 days.
- Agree on a repayment deal with your tax lien. It will be easier to pay off your lien, but it will still look bad on your credit report.
- If you need to refinance or sell your property in order to pay off the tax lien you can get the lien lifted during the time it takes for you to do this.
Paying off the lien is the best way to avoid this problem, but that can cost you a lot of money. Find some way to get a lien off your credit report because it is really bad news to potential lenders.
Additional Resources
Tax Liens
Time Limitatations to Prevent the IRS
from Collecting Tax and Levy
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