tax lien on my credit report

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  #1  
Old 07-31-06, 05:32 PM
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tax lien on my credit report

i bought and sold a condo during the year 2000, and 5 years later i found out that i had an unpaid tax lien against the property. the amount was only $125.00, which i paid as soon as i became aware of it, but now i am having a lot of difficulty obtaining a loan because my credit score is not high enough (due solely to the tax lien). otherwise, i have near perfect credit. the problem is that 2 credit bureaus are still showing the tax lien as being unpaid on my credit report. i have filed a dispute and they are going to investigate. when the bureaus figure out that the lien has been paid, will the tax lien be erased from my credit report or will it always show that i once had an unpaid tax lien? also, will my credit score go back up when they realize that i have already paid the lien?
thanks for any help.
 
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  #2  
Old 07-31-06, 08:30 PM
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Once you get the problem corrected it will show as a paid delinquency, which should help your score go up, but not much -- especially since it's so recent.

It's possible the credit reporting agencies won't be able to verify and it will just fall off, but not too likely. You'd think that the investigation would be something like: the CRA contacts the creditor and says "this has been disputed, send us info on what the correct info should look like". Chances are many creditors wouldn't reply in time, or wouldn't be able to locate the correct info, or would send wrong info and result in clearing your credit. However, what really happens is the corrupt CRA says "Here's the info we have on this person's file, does it look right?" Of course the credit checks the "Yes" box and sends it back. Sure, that qualifies as an investigation, right?

Since the amount was so small, this might be something that you can handle with a letter writing campaign, calmly explaining the situation -- it was clearly an oversight since it was such a small amount, you immediately took care of the problem, and could they pretty-please be nice and remove the mark from your credit. The challenge will be finding the right place to send the letter, which may take some time and patience.

You can also put a 100-word statement in your credit files and explain the situation, and sometimes your mortgage person can talk to the underwriter and smooth things over. Tax lein is a big red flag though, especially one that was unpaid for 5 years.
 
  #3  
Old 08-02-06, 12:40 PM
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Good advice, but a lot of overkill for a simple situation like this.
If that is the only negative thing on your report, you should submit a copy of a paid receipt for when you paid that lien, or get a letter from the tax collectors office stating that lien dated ____ was paid in full on ____ (date). This happens all the time, it's VERY common. Often one bureau may show it paid and another may not--that alone should suffice in most credit decisions. However, since most lending these days is idiot lending based on numbers and not an actual decision, I can see how you'd be having trouble. Provide documentation and file your dispute in writing with copies. That will take care of it. If in a rush, and this is for a mortgage, you can have your broker contact their credit agency to do an investigation for a small fee to get it taken care of and quickly re-scored. Might not be permanent, that's why you dispute, but it can get you through this little instance. Just the letter showing this as paid would probably be enough on it's own, actually. Like I said, this is very common.

Remember to pull your credit report BEFORE you need your credit for this very reason. You get a free copy every year now at www.annualcreditreport.com. It won't have scores, but scores aren't what's important--making sure tradelines are reported correctly and nothing fraudulent is showing is the real purpose here.

jpm is right though, this will still show on your credit report since it DID in fact exist. It just needs to be updated to show a zero balance. This alone shouldn't hurt you too bad though. Your lender may have access to software that can simulate your score once this is corrected and give you an idea (w/i about 20%) of what your score will be after this balance issue is corrected.
 
  #4  
Old 08-11-06, 08:24 PM
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there are loan programs that are not score driven.... so this doent keep you from getting a loan.

maybe try another lender who better understands credit and can guide you to a score increase..... or better yet, get you into one of those loans that arent score driven.
 
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