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nerdtype

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Payment Arrangement to Pay Tax Lien to Increase Credit Score?
I have a Tax Lien on my credit report for $6K, but total taxes owed to IRS is $18K. I also have student loans for $60K. I recently paid off all of my credit cards and collections accounts. I am on a payment arrangement to pay off both student loans and IRS taxes. The question is, how much will be credit score be affected if I pay off the tax lien amount (6K). Should I instead focus on paying off student loans and/or taxes? I only have about $5K in funds right now and would like to know which debt should be priority. A humble thank you to everybody in advance.

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In most of scoring models, other than maybe two models out of 100s and that's pretty iffy, that "paid" derogatory account dose NOT improve your score, only when that account is removed from your report.

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Whenever there is a derogatory mark on your report? Your score usually takes back seat to it, you would have much higher chance of being declined than someone with lower score but clean(er) profile.

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With Federal tax lien, if it's paid or in payment arrangement? You can request a withdraw if certain conditions were met. Google "Fresh Start Program" from IRS, and search form "12277" on their site.

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