Tax Liens Can Affect yoru Credit Report for 7 years

A tax lien is an interest applied to a property to try and force a debt's repayment. In essence, it's an interest put on something by say the IRS to ensure that you pay your taxes to the government. If you don't, that lien stays on the property which adds to what you need to pay. But really, what does that all mean?

Simply put, if you ignore to pay your taxes or just don't want to after receiving numerous letters saying "pay your taxes," they lien is activated and that means you owe money there as well. So, what do you do to try and get rid of it? Pay your taxes and also pay back the lien. Once you have paid back the lien, you are on your way to increasing your credit. But there's still a catch.

How long does a lien stay on your credit for? If you paid it back, seven years. So, by getting a Free Credit Report, you can try and figure out how hurt your credit is by this lien. Free Credit Reports are awesome ways of knowing just how much you have to work to try and beat down all the debt and to increase your credit score. On a site like this, you can even Compare Credit Cards which will make your life easier.

In the end, pay your taxes when the letter comes to say that you owe money. If you don't, this lien gets added and it can do damage to your credit like nothing else. You want your credit to be good, not bad. It makes getting loans so much easier which you definitely want to have.