Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!


Posted in Taxes
Profile Image

Question By

1 Contribution
0 People Helped
Tax Lien Paid Off But Home Insurance Score Dropped Sharply
I had a tax lien. It was already on my credit report; I understand the length of time it will remain. My question is not why the tax lien is still on there.

I noticed in running my credit that it had never been marked paid off, though it was paid off last year. I sent Transunion the release from the IRS marked paid and releasing the lien. Transunion updated to show the lien as paid.

And my home insurance score on Credit Karma dropped 96 points.

The HIS reflecting the UNPAID tax lien on my records was 96 points higher than the new update that shows that same lien as paid off.

I am positive that the tax lien was counted in the earlier, higher score, because this is where I noted it listed as unpaid.

My question is, why on earth is it nearly 100 points worse to pay off your tax lien than to have that same lien listed as unpaid? I was expecting a bit of progress from unpaid lien on record to paid lien on record, though I knew it would still be there and count against me. I wasn't expecting a 100-point penalty for paying it off. I'd think that it reflected better on somebody to pay off a lien than to have that same lien standing open unpaid. Can anybody enlighten me?

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.


Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.