Having a tax lien can be a huge burden in your life. If you failed to pay your taxes, the government can put a claim on your property—which can include land, personal property and financial assets. This can be a worrisome prospect. And if you can’t pay off your tax debt right away, the lien can loom over you—causing you a lot of stress.
However, if you’re dealing with a tax lien, we have some good news. All three credit bureaus (Experian, Equifax, and TransUnion) have begun removing tax liens from taxpayers’ credit reports. If you’re a taxpayer with a tax lien, you could see benefits from this move in a variety of ways:
Your credit score could go up.
Experian estimates that you could see your credit score increase by as much as 30 points on the FICO scale. A higher credit score puts you in better standing for making a big purchase—like a house or car—or starting a business. It can even help you get a job. In government and financial sectors, employers are increasingly running credit checks on applicants prior to extending job offers.
You can get on with your life.
Previously, when a tax lien appeared on your credit report, it became difficult to achieve other goals in life. You were less likely to be approved for a credit card or a loan. Landlords may also be more reluctant to rent you an apartment. This change effectively removes such hurdles.
The change is immediate.
It used to be that when a tax lien was released, it would still remain on your credit report for up to 10 years—thereby extending the above difficulties even after you’d resolved the problem. Thanks to this move, your tax lien will be deleted from your credit report right away.
If you’re contending with tax debt, don’t struggle alone. An experienced tax attorney can help you come up with a solid game plan to get you back on track.