Liens--more specifically, tax liens--are one type of record that can negatively affect your credit rating. These items appear in the "public records" section of your credit report and are obtained from court records, rather than submitted to a credit bureau by a creditor or lender. The taxing authority that files a lien against you can originate at any level of government--federal, state, county or municipal. In most cases, tax liens remain on your credit report seven years after they are paid, after which they expire and automatically drop off. If you notice an outdated tax lien record on your credit report, the Fair Credit Reporting Act authorizes you to file a dispute with the credit bureau to get the expired record removed.
Step 1
Pay the lien. This is the first step to make sure that this record eventually disappears by operation of time. All three credit bureaus keep a record of the lien on file for seven years after the date of payment.
Step 2
Acquire your credit reports from AnnualCreditReport.com seven years after the lien was released. In most cases, the paid lien record should have dropped from your report. If it remains, you should file a dispute with the credit bureau in question.
Step 3
Write down your dispute, says the Federal Trade Commission, unless you're filing a complaint with Experian. Include copies of your credit report with the expired lien highlighted and copies of supporting documentation providing proof of the release date.
Step 4
Mail your dispute to the credit bureau via certified mail, return receipt requested, to ensure that it is received, advises the FTC.
Tips and Warnings
- It takes around 30 days for disputes to be resolved, says the FTC. You'll receive written correspondence from Experian, Equifax or TransUnion indicating their findings. If the lien record was removed from your credit report, you'll receive a revised copy. The three nationwide credit bureaus handle lien records differently. Equifax and TransUnion will keep unpaid liens on your report indefinitely, if they go unpaid. Experian removes records of unpaid liens after 15 years have passed. MSN Money describes tax liens that show up on your credit report as "monsters that will trash your credit faster than anything else." Get taxes paid before a lien is ever filed. Even after the lien is released, your credit report continues to suffer.
- According to Credit.com, Experian now vets disputes through an online appeal form located at Experian.com. Be prepared to mail this credit bureau proof of the date you paid the taxes if Experian requests additional information. Credit bureaus can make mistakes, and information on your credit report can be entered incorrectly. Compare the date the tax lien was released with that entered into your credit history. Beware credit repair clinics and credit doctors. Credit.com indicates that these businesses charge you a hefty fee to perform the same services that you can do yourself. Also, if a record of a lien is both accurate and timely, by law, credit bureaus cannot take it off your credit report before seven years have passed. Credit repair services have no special powers to hasten this process along.
Things You'll Need
- Credit reports from Experian, Equifax and TransUnion
- Documentation supporting proof of tax lien payment
Member Comments