Tax lien to be released soon

[Anonymous]

I have been making payments on a  state tax lien that was filed in Jan of this year for almost $3,000. Next month I should be able to get it released...should I expect any increase in my score? It had been reporting on two of the three CRAs and just last week it hit the last one....making my score drop 34pts. I was hoping to get a few of these points back.  I was curious what others experiences have been.

[Anonymous]

Good question. Are liens the same as judgments and collections? I know paying those off usually does not result in any score increase...

[Anonymous]

paid tax leins stay on your reports for seven years from date of payment in full.  I have not been successful in getting the IRS to remove it for me, but I still try.

[Anonymous]

---

@Anonymous wrote:
Good question. Are liens the same as judgments and collections? I know paying those off usually does not result in any score increase...

---

The real difference in paid (or released) tax liens and judgments/collections, is that the CRTP "clock" only begins "ticking" after it's been paid. Meaning, a tax lien will continue to report indefinitely if unpaid, while a PAID tax lien will fall off 7 years after the date its released.

Judgments and collections do not have that kind of status and will fall off after 7 years regardless of whether they're paid or not.

And yup, we have one on our CRs, too. Paid in April this year and should fall off EX & EQ (when it was released, TU just deleted it for some reason -- not complaining, of course) in the year 2015.

[Anonymous]

Wonderin....did you have any kind of jump in points when you got it paid off?

[Anonymous]

paid or unpaid makes no difference to fico scoring

[Anonymous]

---

@Anonymous wrote:
Wonderin....did you have any kind of jump in points when you got it paid off?

---

Nope. Peeler's right ... FICO sees paid and unpaid tax liens (or judgments, collections, etc) the same and scores'em as such.

BUT, once it was paid, we got more pre-approvals and were actually approved for credit. Even though FICO doesn't penalize you MORE for an unpaid tax lien, potential creditors DO.

[Anonymous]

Would we get a score increase when a Tax Lein from the IRS is removed from the report?

[brother7]

I have a Federal Tax Lien on my CR. The lien is self-releasing, as explained in this portion of the original lien:

---

IMPORTANT RELEASE INFORMATION: For each assessment listed below, unless notice of the lien is refiled by the date given in column (a), this notice shall on the day following such date, operate as a certificate of release as defined in IRC 6325(a).

---

In my case, the self-release date was Apri, 2007.

Only recently have I started paying attention to my CR and found that the lien was still on all 3 CRs. Upon further research, I discovered that I have to file a release form with my local recording office. For instructions on how to request such document, see this PDF on IRS.gov

I followed those instructions, received the Certificate of Release of Federal Tax Lien from the IRS and recorded the document at my local recording office in early January, 2009. Then I submitted an online dispute with all 3 CRAs. Still waiting on the result.

Question:  How will the recordation of the release affect my credit score?  Intuitively, I would think that if a lien is a huge negative, then a release of lien would be a huge positive.

[brother7]

---

@Anonymous wrote:
paid or unpaid makes no difference to fico scoring

---

You're saying that tax liens, no matter what their status, do NOT affect FICO scores?  Is this true?  If so, I find that very strange.  Can someone confirm this please, as I just got an IRS tax lien released and am looking forward to a nice spike upwards in my CR.