Credit Score For Dummies

Just the sound of the words “tax lien” sounds frightening. And, to quote a line from the 1986 version of “The Fly,” someone who is looking at a tax lien on a credit report should “Be afraid. Be very afraid.”

Why? Because any lien, but especially a tax lien can wreak havoc with their finances for years to come and impact also every major financial transaction they make.

When Uncle Sam wants money the government is due, it can put a lien on a taxpayer’s property that will remain on a credit report until the debt is settled. An individual with this type of burden can’t expect to make any profit from liquidating their assets and in some cases their wages may be garnished also.

Having Uncle Sam “liening” on you, pretty much makes the individual dead in the water financially, so to speak. There we go again w

If you have a tax lien on your credit report, you should take immediate action to remove it. This is a very bad mark and will lower your score considerably.

The first step is to have the bureaus validate the lien. You need to send each bureau a dispute letter. Once your letter is received an investigation will occur. The bureaus will contact the government and ask them to verify your debt. If it is verified you are going to have to make payment to remove it.

Depending on the amount you owe it may be in your interest to contact a tax negotiator. This is because they can often negotiate a reduced payment for you. However you can also negotiate directly with the government.