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Posted in Taxes
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TaxPuzzle

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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?

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