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Tax Lien effect on score

Frequent Contributor

Tax Lien effect on score

Does the age of a tax lien affect credit score?

 

Put another way, will a CR with a 1-year old Tax Lien have a lower score than a CR with a 2-year old Tax Lien, which in turn has a lower score than a 5-year old Tax Lien?

 

I have a tax lien that's been released.  The CRA shows an incorrect release date of 01/2009. The true release date is 04/2007.  Just wondering if it's worth the effort to get the date corrected.



09/30/2017 - EX 811 (Credit Scorecard EX FICO® Score 8, range 300-850)
11/20/2017 - TU 842 (Discover TU FICO® Score 8, range 300-850)
10/24/2017 - EQ 845 (Citi EQ FICO® Bankcard Score 8, range 250-900)
GOAL - 800! - App free since 11/22/2017
Message 1 of 4
3 REPLIES
Moderator Emerita

Re: Tax Lien effect on score

Yes. Derogs vary in their damage by recency, frequency, and severity. In your example, the liens are equally severe (they're all tax liens), but the more recent, the more damage.

They'll never stop hurting completely until they're off your report, though. In fifteen years.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 2 of 4
Established Contributor

Re: Tax Lien effect on score

brother7,

 

Which CRA is reporting the time difference of 20 months? What do the other 2 CRA's report? Is it possible that the 4/2007 date is when the tax lien was filed and then you paid it off until late 2008. Tax liens stay on your credit report for 7 years after the date of release.  

 

I've never heard of any negative info. remaining on your credit report for 15 years. It may be true but I've never heard of it. I know for a fact that it's 7 years for a released tax lien.

FICO scores on November 17, 2014 (prior to applying for and being approved my mortgage)

EX=738
EQ=735
TU=754

FICO scores on March 4, 2015 after being approved for mortgage and buying the home, the mortgage isn't yet reporting.
EX- 689 EQ- 739 TU- 739
Message 3 of 4
Frequent Contributor

Re: Tax Lien effect on score

The original filing date of the lien was 12/2003. All 3 CRAs show the tax lien.

 

When I ordered a copy of the lien document from my local recording office, I noticed that it was a self-releasing lien, ie if the IRS doesn't refile by a certain date, the lien self-releases. The self-release date was 04/2007. I contacted the IRS and they issued me a Certificate of Release of Federal Tax Lien to file with my local recording office, which I did in 01/2009.

 

I filed a dispute with all 3 CRAs, saying the lien has been released.  Thusfar, I've heard back from EQ and EX.  Both now show the tax lien as released but the released/resolved date is 01/2009, so I've opened new disputes with both to have the date changed to 04/2007.

 

Still waiting to hear back from TU.

 

Regarding the date that tax liens fall off the report, I got the following info off the EX site:

 


Unpaid tax liens remain on a credit report for 15 years. That’s longer than any other item in a credit report. Paid tax liens remain seven years from the date they are paid.

 

I guess the message from Uncle Sam is, “Don’t mess with the tax man!”

 

The silver lining is that once paid, the significance of the lien begins to decrease. The longer in the past the lien was paid, the less impact it will have on your ability to get credit, and in time it will be deleted.


Reference: Tax liens and your credit report  (Experian site)

 



09/30/2017 - EX 811 (Credit Scorecard EX FICO® Score 8, range 300-850)
11/20/2017 - TU 842 (Discover TU FICO® Score 8, range 300-850)
10/24/2017 - EQ 845 (Citi EQ FICO® Bankcard Score 8, range 250-900)
GOAL - 800! - App free since 11/22/2017
Message 4 of 4