Thursday, October 29, 2009

The Disconcerting Matter Of Having A Tax Lien On Your Credit Report

By Rose Z Howard

Having a tax lien put against you that shows on your credit or against your property can in reality be one of the most arduous credit issues that you ever deal with. The Internal Revenue Service can be rather merciless when it comes to being paid their money and there is an explanation for the old maxim about "death and taxes" because you are not prone to be able to get out of it finally without paying at least a fraction of it.

If you have property, the tax lien will be put against your property, stopping you from selling it and it is probable that in the long run they could even take away the real estate if the tax lien is high enough. If you do not possess property it will be put against your credit and that will hinder you from acquiring a home mortgage but also car loans, student loans and even credit cards. A tax lien can be quite injurious to your credit scores.

You will most likely have to pay the tax lien off or at the very least negotiate for a lesser amount. The disturbing part of it is that even after the tax lien has been satisfied it can stay on your credit report for as long as 7 years. If you do not pay it off it can stay on there for as long as 15 years. If it is not fulfilled they can also renew it so you might have a tax lien on your credit forever.

You are almost certainly wasting your valuable time if you attempt to challenge and fight the tax lien. The IRS is very influential and they will track you down and locate you. The best you can usually do is to collaborate to pay a lesser sum to satisfy the debt.

After you have paid off the tax lien, it is possible that it will still show on your credit report for as long as 7 years. Though, you can take some actions to try to avoid this. When you are negotiating for the lesser amount, put in a request that they delete it from your credit report also. If you are ineffective at that you can try to dispute the listing with a letter.

If you write a dispute letter, you will need to send it to all three key credit reporting bureaus, which are TransUnion, Equifax and Experian in the United States. The Fair Credit Reporting Act has given consumers the right to dispute any negative or misleading listings on their credit report. If you have settled with the IRS, any bad listings about the tax lien can be misleading and unfair.

As you are disputing the derogatory listings make sure that you keep a copy of all communications either from the credit bureaus or to the credit bureaus. After they receive the letter, they have 30 to 45 days in which to either prove the truth of the listing or delete it from your report. If you do not get a removal immediately you may have to try again as many times as it takes to get results.

Writing letters of dispute and doing other credit repair tips can be very advantageous for you and your economic life in the long run. You can do it yourself or engage a professional but you are accountable for knowing and dealing with whatever shows on your credit report and if you need to do some credit repair, it is better to do it sooner rather than later when you need to have good credit.

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