I have had a state tax lien for about 5 years now, rather large one. Anyhow i finally got it paid off so thats a good thing. Anyhow i need to know if there is anything i can do to get it removed from my credit reports? I dont really know how much it drags down my fico but it cant be good. Thanks for your input.
It's definitely hurting your FICO scores in a bad way. However, paid tax liens are really difficult to get removed from your credit reports. Your best bet is to dispute it through the CRAs and hope that the IRS won't care to respond now that it's paid. If it is verified, it will sit on there for 7 years from when it was satisfied. At the very least, make sure it's been updated on your reports to a "paid tax lien".
Any idea how many points its likely knocking off my credit score? I do know that the reported amounts on my reports is different than what i owed. So could i dispute it that way? Also how is the best way to get it reported as paid on my reports? Can i fax them the release of leins or how does that work? Thanks
It's too difficult to say because there are so many other variables affecting your FICO scores. If this is the only baddie on your reports, you can bet it's having a significant negative impact. But yes, if the reported amounts are incorrect, that's definitely something you can dispute through the CRAs. Also, the IRS has 30 days to release a tax lien once it's been paid, but I'm not sure about your state's rules. You should look them up. If they haven't updated it, I would contact them and request 3 copies of the release showing that the lien was paid. Then you can take those copies and submit them to each of the credit bureaus requesting that the lien be updated. It may not help your credit scores at all, but a "paid" lien will look much better than an "unpaid" one to potential lenders.
A tax lien can drop your score by 50 points or more. The tax-lien can be removed after it is paid off; but, you must contact the government agency that placed it and follow their procedures. Good Luck.
