Remove Federal Tax Lien from Your Credit Report

A lien is just granted property interest over a piece of property to insure that a debt or obligation is met. A federal tax lien can be stated to be a lien placed on a property to secure payment of taxes. They are imposed when there has been a failure to pay taxes, which could be any tax like personal property tax, real property tax, income tax or any other delinquent tax. That is, if you have not paid your tax and have ignored to pay it even after demand, the tax amount along with any fines and interest will become a tax lien to the government upon any real or personal property belonging to you. This is placed on your property to ensure that before the property is sold the pending taxes are paid up, either by you or by the buyer.

If a tax lien has been placed on any of your real or personal property, it will appear in your credit report. It can haunt you for a long period and in case you are wondering "How long do tax lien stay on a credit report", here are the answers: Paid tax liens continue to appear in the credit report for seven years from the date of paying the lien. In case, the tax lien has not been paid, it will remain for a minimum period of fifteen years; in some cases it may remain forever. Equifax and TransUnion show unpaid tax liens indefinitely while Experian shows it for fifteen years.

This action will affect your credit rating in a negative way and in turn will reduce your credit score. This means that your credit worthiness in the loan market is lowered and you will be perceived as a high risk debtor. Your ability to find a lender for any future loans could be seriously hindered by this. Therefore, it is important that you remove a federal tax lien from your credit report as soon as possible. The only way you can do this is by paying the pending taxes in full and ensuring that the tax agency removes the lien, by showing them the receipt for your paid taxes. You should also make sure that the tax settlement is reflected in your credit report - please note that only the severity of the lien's impact on your credit rating is reduced, as the lien will continue to appear for seven years in your credit report. For more information please visit my Lexington Law review page.

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