A tax lien, which is a legal term for money owed on a property or other major asset, could be detrimental to your credit score. This negative information could stay on your credit report for several years, affecting your chances of receiving car loans, mortgages and other forms of credit. However, USA Today reports that the Internal Revenue Service (IRS) will be more relaxed when it comes to issuing these credit black marks.
What does this mean for consumers? According to financial columnist Sandra Block, the IRS is giving borrowers a lot more leeway – they will not have to worry about being issued a tax lien if they owe less than $10,000 in back taxes, up from the previous threshold of $5,000.
While tax liens have the capacity to stay on your credit report for up to seven years, now consumers can request that the negative information be removed once they have settled their debt. However, this will not be done without a request, so make sure to keep in contact with the IRS and confirm that it has been removed from your personal credit report.