Unpaid property taxes reached high levels in 2009 --- for example, in Nashville, Tennessee, the figure came in at about 8 percent among all homeowners that year, according to "USA Today." You can't escape taxes owed to the government, and not paying them simply adds another headache: ruining your credit. If you can't pay your property taxes, you can get help from your creditor and the government, so don't ignore the problem.
Identification
Leave property taxes unpaid long enough and they'll appear on your credit report, but usually as a tax lien --- where the government lays claim to property in case you try to sell it --- or a collections account. Also, the amount of tax that you owe has no impact on your credit score. Just the fact that you have a tax lien is all that matters.
Effect of a Tax Lien
Tax liens have a different effect on each credit scoring system, but they're viewed as disastrous by nearly all creditors and credit agencies, because they reflect an inability to pay an obligation. On the FICO rating scale, a tax lien has a similar effect to a foreclosure, which hurts an excellent score by about 150 points.
Time Frame
You won't have to deal with an unpaid tax lien forever, but it may seem like it: An unpaid tax lien effects your score for 15 years, except in California, where it stays on your report for 10 years. The credit agencies report paid tax liens seven years from the date you pay them.
Tip
Not paying property taxes could lead to foreclosure. A foreclosure may not pay off the balance on your mortgage, so you could further damage your score if the mortgage provider sues you for the deficient balance. If you can't pay your taxes, ask your state's tax assessment office to delay your bill for a few months. Your lender may help you pay property taxes by setting up an account for you to contribute money throughout the year or offering you a small loan. The bank doesn't want to risk losing money on your home loan because of unpaid taxes.
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