Federal Tax Lien, effect of ability to get credit card

[2ride]

I have a recently filed ( Jan 2010 for 100k ) Federal tax lien. I think the lien is against my house.

 

What effect does this have on my ability to get new credit?

 

My scores are 756 tu, 731 ex, and 780 eq yet I'm having trouble getting a new CC.

 

I'm recently 7 years OOB ( 8 months ago ) and all negatives have been expunged except for the public notice.

 

My assumption is the lien is what is hurting me but wanted to hear from some of the experts on here before putting together a plan of action.

 

Right now my only cards are a HSBC Visa ( 1700 limit ) and HSBC MC ( 1500 limit ). I've had these cards for many years.

 

My goal is to get a decent rate card with a 10k or so limit.

 

Thanks,

 

2ride ( NC )

[centex]

a fresh lien for $100K will be a SIGNIFICANT obstacle. I got a fair amount of credit with a smaller lien that was a few years old at the time of the applications and I also did a LOT of phone and written requests for reconsideration and willingness to provide financials to some lenders.

[hdporter]

My scores are 756 tu, 731 ex, and 780 eq yet I'm having trouble getting a new CC.

 

You cite EX. That suggests these are "FAKO" scores. Pull you TU & EQ from myFICO. I guarantee (based on someone I know's experience) that your actual FICO's are at least 50 points lower. It seems FICO is more troubled by a tax lien than FAKO scores typically are.

[2ride]

hdporter - you are correct - fico scores in 650's

 

Still doesn't seem that bad to me since I've seen much lower scores during the 7 years since BK

 

I have an account with NFCU and a couple loans that are in good standing and always have been.

 

Going to talk to them in person Monday in order to get the CC I'm looking for.

 

Any advice on tactics?, i was going to simply explain my situation, the reason for the lien and what I'm doing to fix it.

 

I have outstanding income and nothing negative now in over 7 years except for one 30 day late 18 months ago ( which really was a mistake by HSBC but I've given up trying to get it removed due to massive time invested with no return

 

Thanks for any input ....

 

2ride

[cashnocredit]

My scores are 756 tu, 731 ex, and 780 eq yet I'm having trouble getting a new CC.

 

You cite EX. That suggests these are "FAKO" scores. Pull you TU & EQ from myFICO. I guarantee (based on someone I know's experience) that your actual FICO's are at least 50 points lower. It seems FICO is more troubled by a tax lien than FAKO scores typically are.

 

Um, I can guarantee you they are not always at least 50 points lower. I have an even larger 4 y/o fed tax lien than 2ride. My two FICOs are within 20 points and 2 points of the FAKOs.

 

No problem getting secured CCs. (Its a paid lien) Just got a preapproved for zync and green but I'm gonna pass. Love the Citi with the 25k limit but they have dropped the max to 5k. Not sure what happens when the 18 months is up but I'm hoping they keep it as is with the 4% CD.

[hdporter]

My scores are 756 tu, 731 ex, and 780 eq yet I'm having trouble getting a new CC.

 

You cite EX. That suggests these are "FAKO" scores. Pull you TU & EQ from myFICO. I guarantee (based on someone I know's experience) that your actual FICO's are at least 50 points lower. It seems FICO is more troubled by a tax lien than FAKO scores typically are.

 

Um, I can guarantee you they are not always at least 50 points lower. I have an even larger 4 y/o fed tax lien than 2ride. My two FICOs are within 20 points and 2 points of the FAKOs.

 

No problem getting secured CCs. (Its a paid lien) Just got a preapproved for zync and green but I'm gonna pass. Love the Citi with the 25k limit but they have dropped the max to 5k. Not sure what happens when the 18 months is up but I'm hoping they keep it as is with the 4% CD.

 

A key difference is that your lien is 4 y/o. OP and my friend have liens filed within the last year. (Friend's $10K lien is marked released --

 

Credit scores once lien reported:

 

Credit Secure EQ: 786 TU: 763 EX: 772

myFICO EQ: 698 TU: 708

 

Lien is only report blemish. Public record is clearly noted on CS score summary for each CRA.

[cashnocredit]

My scores are 756 tu, 731 ex, and 780 eq yet I'm having trouble getting a new CC.

 

You cite EX. That suggests these are "FAKO" scores. Pull you TU & EQ from myFICO. I guarantee (based on someone I know's experience) that your actual FICO's are at least 50 points lower. It seems FICO is more troubled by a tax lien than FAKO scores typically are.

 

Um, I can guarantee you they are not always at least 50 points lower. I have an even larger 4 y/o fed tax lien than 2ride. My two FICOs are within 20 points and 2 points of the FAKOs.

 

No problem getting secured CCs. (Its a paid lien) Just got a preapproved for zync and green but I'm gonna pass. Love the Citi with the 25k limit but they have dropped the max to 5k. Not sure what happens when the 18 months is up but I'm hoping they keep it as is with the 4% CD.

 

A key difference is that your lien is 4 y/o. OP and my friend have liens filed within the last year. (Friend's $10K lien is marked released --

 

Credit scores once lien reported:

 

Credit Secure EQ: 786 TU: 763 EX: 772

myFICO EQ: 698 TU: 708

 

Lien is only report blemish. Public record is clearly noted on CS score summary for each CRA.

 

Could well be that recent liens hurt FICO more, I had never checked my credit reports let alone FICO until the lien was about 2.5 years old. At that time my FICO didn't exist as my only CL showing was closed 7 years earlier. My first FICO score was a few months later after I had inadvertantly opened a 1k overdraft line when I moved some money to Union Bank. My interest in credit came about indirectly from learning about the use of FICO in the housing mortgage securitization ratings and personally from getting more push back using debit cards to rent cars and get hotel rooms. This led to the Citi secured CC* which I view as a high paying CD that comes with a (nearly free) CC.

 

*Thanks to CB

[Gill]

There's been some new regulations with regards to federal tax liens. It seems that the tax payers advocate has given some flexibility to tax payers where the IRS can remove the lien in the event of it harming one more than doing any good. The IRS has found that it's more important to encourage compliance than non-compliance. There are several youtube broadcast on the topic. It's unfoutate that alot of states having taken a similar outlook from some of our members. Here's the link:

 

http://www.irs.gov/advocate/index.html

[hdporter]

No new "regulations", that I'm aware of.

 

Head of the Advocate's office is making noise that IRS relies too heavily on Liens as an enforcement action. However, based upon very recent experience of friend with IRS and Advocate offices, IRS is largely sticking to it's guns.

 

If you're in negotiations re settlement of a tax liability, there is room to get a Tax Lien withdrawn as a means to further that settlement. However, if the tax lien is now paid and recorded as "released", IRS won't consider an after-the-fact withdrawal (which would expunge from credit report).

 

(Friend's case is one in which late return filing gave rise to lien ... when it was subsequently filed, the return reflected an overwithholding of actual liabilitiy and no additional payment was required to release the lien. IRS rejected a request/recommendation from Advocate's office to withdraw the lien. Friend is now consulting with a tax lawyer to see if there's any further recourse ... doubtful)

[sharnese]

This is true because a lien was filed after we made our tax payment soafter getting the run around with a agent,we went to the Advocate who has requested the lien to be deleted from DH credit report.

[sharnese]

Oh,we are hoping that it is deleted because it really was filed in error,however,as hdporter said,they just may reject the request because we don't owe any taxes...I hope not.

[Elizabeth_Speaking]

No new "regulations", that I'm aware of.

 

Head of the Advocate's office is making noise that IRS relies too heavily on Liens as an enforcement action. However, based upon very recent experience of friend with IRS and Advocate offices, IRS is largely sticking to it's guns.

 

If you're in negotiations re settlement of a tax liability, there is room to get a Tax Lien withdrawn as a means to further that settlement. However, if the tax lien is now paid and recorded as "released", IRS won't consider an after-the-fact withdrawal (which would expunge from credit report).

 

(Friend's case is one in which late return filing gave rise to lien ... when it was subsequently filed, the return reflected an overwithholding of actual liabilitiy and no additional payment was required to release the lien. IRS rejected a request/recommendation from Advocate's office to withdraw the lien. Friend is now consulting with a tax lawyer to see if there's any further recourse ... doubtful)

 

 

On what basis would one request a tax lien be withdrawn? Do you mean to help enable one to get a loan to pay the tax?

 

This is where we are. Late filing, and tax amount stated is way off. How did your friend find an Advocate?

 

 

Thanks for any information.

 

 

OP, did you have any luck with your CU? Mine has been great. I got an approval last month with a tax lien, plus numerous small CL MC/Visas and some store cards.

Edited May 18, 2010 by Elizabeth_Speaking

[hdporter]

No new "regulations", that I'm aware of.

 

Head of the Advocate's office is making noise that IRS relies too heavily on Liens as an enforcement action. However, based upon very recent experience of friend with IRS and Advocate offices, IRS is largely sticking to it's guns.

 

If you're in negotiations re settlement of a tax liability, there is room to get a Tax Lien withdrawn as a means to further that settlement. However, if the tax lien is now paid and recorded as "released", IRS won't consider an after-the-fact withdrawal (which would expunge from credit report).

 

(Friend's case is one in which late return filing gave rise to lien ... when it was subsequently filed, the return reflected an overwithholding of actual liabilitiy and no additional payment was required to release the lien. IRS rejected a request/recommendation from Advocate's office to withdraw the lien. Friend is now consulting with a tax lawyer to see if there's any further recourse ... doubtful)

 

 

On what basis would one request a tax lien be withdrawn? Do you mean to help enable one to get a loan to pay the tax?

 

This is where we are. Late filing, and tax amount stated is way off. How did your friend find an Advocate?

 

 

In my reading, that's the precise context in which approval of a request to withdraw a lien is discussed. But there's an indication that consideration for a withdrawal as a means to reach lien settlement can be considered under broader circumstances, particularly if it's been put forward with the reccomdnation of the Tax Advocate office.

 

However, as noted, once the Lien has been released as either paid, or because a return is filed showing no additional tax due, options for withdrawal appear to be much more limited. Therefore, it's important to make the request early on.

 

To contact the Taxpayer Advocate office, I advise you for fax IRS Form 911, with a summary of your situation, to your local Advocate Office. See: http://www.irs.gov/advocate/article/0,,id=97402,00.html for the form (PDF fill) and the address/fax number of your local office. They should contact you within the week.

[Elizabeth_Speaking]

Thanks so much for the info.

[2ride]

Ended up getting 15k CC from NFCU

Lien still on all three CBs and unpaid

This is awesome!

 

Highest limit card I've had for the last 7 years is $1700

 

NFCU rules

[559cubs]

Ended up getting 15k CC from NFCU

Lien still on all three CBs and unpaid

This is awesome!

 

Highest limit card I've had for the last 7 years is $1700

 

NFCU rules

 

 

Congrats!

[Elizabeth_Speaking]

Fwiw, either CK or SC (can't remember which) rates my 1½-year-old tax lien as having a "medium impact" on my scores.