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Tax lien impact on scores?

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masscredit
Valued Contributor

Tax lien impact on scores?

I know tax liens have a pretty good impact on scores. In general, how much of an impact and does that impact become less as they age? 

 

I'm looking for a way to get my scores up a little higher but have a bunch of tax liens and a BK that are holding me back. Nothing I can do about the BK. That was discharged in Feb of '10 so it will be on my reports for awhile. I have 5 liens. My EX and EQ reports have 4 listed. Different ones aren't being reported on each. No complaints about that. All 5 are being reported to TU. Maybe that's why GE Cap won't give me any luv. 

 

The most recept lien is a state tax of $160. That was filed in November of '13 so it is fresh. The others are from 2009, '10 and '11. Would it be worth it score wise to tax care of that $160. from '13. Yeah, I know, it's worth it to take care of it anyway but I'd like to see a score increase from it. I have a payment arrangement with them ($100. per month) but that goes towards the oldest bill which is '09. In a way, I don't want to pay off the other one because I don't want to attract attention and have them think that I should be paying more per month. 

 

I keep track of all of my scores, it doesn't look like I had much if any of a hit when that lien posted. Any flucuation in scores that month might have been from utilization. 

 

I believe I read something before that said after "x" number of liens, new ones really wouldn't matter to much. Don't know how true that is.

 

Thanks!

Pre-Credit Rebuild Scores Pre-DC (3/24/22) - EQ - 524 / TU - 519 / EX - 495

Current Scores - EQ - 687 / TU - 663/ EX - 677

SDFCU Secured - $5000 / TD Bank - $5000 / Mercury - $5000 / Capital One Savor One- $5000 / Capital One QuickSiver - $4500 / Ally Master Card - $2800/ Walmart Mastercard - $2250

Andrews FCU SSL $1500
Message 1 of 6
5 REPLIES 5
axledobe
Frequent Contributor

Re: Tax lien impact on scores?

I had a state tax lien that had been paid for 5.75 years deleted from EX yesterday. My score went from 716 yesterday morning to 788 yesterday afternoon after the deletion. That was my final derog on any report so, in my case, that old tax lien was worth  72 points.  I was actually very surprised it jumped that much. 


FICO SCORES: TU 769; EX 790; EQ 790 ***Gardening indefinitely***



Message 2 of 6
masscredit
Valued Contributor

Re: Tax lien impact on scores?

Don't know if it varies by state but shouldn't that have been deleted after it was paid off? From my state -

 

A taxpayer that wants to obtain a full release of a lien must pay the amount shown on the lien plus any additional interest and penalties accrued to the date of payment.  If the taxpayer wants an immediate release of the lien, payment must be made by bank check, personal money order, certified check or attorney's Client Fund check.  If payment is made with a personal check, the lien will ordinarily not be released until 30 days after the date the payment is credited to the taxpayer's DOR account.  If the taxpayer requests an earlier release, a copy of the cancelled check must accompany the request.  This delay is necessary to assure that the check has been honored.

Once payment has been received, the Department of Revenue will make every effort to release tax liens by notifying the agencies where they have been recorded.  If the taxpayer finds that the lien has not been released, he or she may request a release by contacting:
 

Chief, Collections Bureau
Massachusetts Department of Revenue
P.O. Box 7021
Boston, MA  02204

For further information, call (617) 887-6400.


The Department of Revenue will record all releases of Massachusetts tax liens unless written instructions to the contrary from the taxpayer are received by the Collections Bureau Chief.

Pre-Credit Rebuild Scores Pre-DC (3/24/22) - EQ - 524 / TU - 519 / EX - 495

Current Scores - EQ - 687 / TU - 663/ EX - 677

SDFCU Secured - $5000 / TD Bank - $5000 / Mercury - $5000 / Capital One Savor One- $5000 / Capital One QuickSiver - $4500 / Ally Master Card - $2800/ Walmart Mastercard - $2250

Andrews FCU SSL $1500
Message 3 of 6
gdale6
Moderator Emeritus

Re: Tax lien impact on scores?

If you want the paid tax liens off your CRs you need to file for lien withdrawl, not all states allow this you will need to ask and apply for it with the taxing authority that filed the lien. A release of the lien only translates to a paid status on your CRs it does nothing for your score and paid liens stay around for 7 years after date of payment with the exception of CA which allows it to remain on file for 10 years from date of filing, irregardless of the date paid. PRs act differently scoring wise in FICO, I have FICOs in excess of 770 on EX & EQ, TU is a lousy 719 because it has a BK over 9 yrs old now and that TU FICO will not move it will remain range bound, (2 yrs of 710-723 ), the reports have near identical info on them so you can see it will be a larger negative on your score the entire time it reports. Removing 1 PR out of many isnt going to give you much of a bump either if you see one at all.

Message 4 of 6
masscredit
Valued Contributor

Re: Tax lien impact on scores?


@gdale6 wrote:

If you want the paid tax liens off your CRs you need to file for lien withdrawl, not all states allow this you will need to ask and apply for it with the taxing authority that filed the lien. A release of the lien only translates to a paid status on your CRs it does nothing for your score and paid liens stay around for 7 years after date of payment with the exception of CA which allows it to remain on file for 10 years from date of filing, irregardless of the date paid. PRs act differently scoring wise in FICO, I have FICOs in excess of 770 on EX & EQ, TU is a lousy 719 because it has a BK over 9 yrs old now and that TU FICO will not move it will remain range bound, (2 yrs of 710-723 ), the reports have near identical info on them so you can see it will be a larger negative on your score the entire time it reports. Removing 1 PR out of many isnt going to give you much of a bump either if you see one at all.


Is that the case if's a recent one? I'm starting to put together a 2-5 year plan so I guess I'm going to have to do something with these at some point. Either payment arrangements that will go on forever. I believe the IRS will withdraw the liens and take them off of my reports if I do that. May try for an offer in compromise first. The person that handles things like this at my accountant's office said they are usually pretty good to work with for an OIC. My state DOR usually don't do anything with those. They want all the money! 

Pre-Credit Rebuild Scores Pre-DC (3/24/22) - EQ - 524 / TU - 519 / EX - 495

Current Scores - EQ - 687 / TU - 663/ EX - 677

SDFCU Secured - $5000 / TD Bank - $5000 / Mercury - $5000 / Capital One Savor One- $5000 / Capital One QuickSiver - $4500 / Ally Master Card - $2800/ Walmart Mastercard - $2250

Andrews FCU SSL $1500
Message 5 of 6
azguy13
Senior Contributor

Re: Tax lien impact on scores?

DW's state tax lien was just deleted and she went from 714 to 768 on TU

 

 

Message 6 of 6
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