The report of a Tax lien and on your credit report can have a pretty serious impact on your credit score as it stays on your credit report for a period of 15 years. If the tax lien has been reported owing to an error or misinformation that it can be removed from a credit report by following the dispute process that is available to you online, over the phone or through the e-mail.
As it is a serious matter to dispute you should be able to provide valid documentation to back up your claim. A common situation where the tax lien can be disputed is when it does not belong to you. Tax lien by a close family member was possibly staying with you at the same address may have had his recorded on your credit report by mistake. In this case you should have it removed as soon as possible. It is almost impossible to say as to how much of an impact this deletion will have on your credit score. While it is agreed that the impact of the tax lien on the credit score a severe, credit reports are not all alike.
Credit scoring system’s weight every information on your credit report individually and in comparison to the other items in your credit history. If there is no other negative information reported for your credit copper credit history then deleting the tax lien will have a dramatically positive effect on your credit score. However, on the other hand if you have other negative information present as well such as late payments, collection accounts, bankruptcy or other kinds of unpaid debt the deletion of one single negative item may not have much of an impact because its affect on your credit report may be not as much as the other factors combined. Another thing to remember is that different credit scoring models weigh different negative information differently. Different credit scoring models give prominence to different data.
That said it should be duly noted that the report of a tax lien on your credit report is always negative. Removing it from your credit report can only have a positive effect regardless of how much. Unpaid debt and the tax lien is is not something that future lenders want to see. Removing it will make you a better choice for credit in the future.