Credit and taxes are both pretty high up there on the adult responsibility ladder.
Putting them together kinda makes you want to hide under a rock. Don’t worry. You don’t need to know everything about credit (or taxes) in order to start taking steps in the right direction. You’ll learn what you need to along the way.
Let’s take a look at some of the initial questions you probably have about your tax debt and how it will affect your credit score.
Will a tax debt show up on my credit report?
Well, it could. The IRS will not automatically run off to the land of credit agencies and warn them about you if you have built up some tax debt over the years. However, if you owe over $10,000 in taxes and continue to do nothing about it, then a Notice of Federal Tax Lien is automatically filed against you. This lien has the potential to be pretty damaging to your credit score – it will show up as a ‘seriously negative’ item on your credit report. If this has happened to you, don’t panic and keep reading. We’ll let you know how to remove this from your record and prevent this from happening to you in the future.
Can I remove a tax lien from my credit report?
You have a tax lien. This is a stressful situation, but you can only panic so much. Now you need to take baby steps toward fixing it. To do this, you’ll need to initiate repayment of your debt. Since this can stay put on your credit report up to seven years after the bill is paid, it is important to take action sooner rather than later. (more…)