How Long Do California State Tax Liens Stay On Your Credit

How Long Do California State Tax Liens Stay On Your Credit?

When you owe taxes to the state of California, the Franchise Tax Board (FTB) has the authority to place a tax lien on your property. A tax lien is a legal claim against your assets, including real estate, personal property, and financial accounts. This lien serves as a way for the state to secure the amount owed and ensure payment. However, having a tax lien can significantly impact your creditworthiness and financial well-being. In this article, we will discuss how long California state tax liens stay on your credit and provide answers to some frequently asked questions.

The Duration of California State Tax Liens on Your Credit:

In California, state tax liens can remain on your credit report for up to seven years from the date they are filed. The seven-year period is dictated by the Fair Credit Reporting Act (FCRA), a federal law that regulates the collection, dissemination, and use of consumer credit information. The FCRA sets a maximum time limit for reporting various types of negative information, including tax liens.

It’s important to note that the seven-year period starts from the date the lien is filed, not the date it was paid off or released. This means that even if you pay off the lien before the seven-year mark, it will still remain on your credit report until the expiration of the reporting period.

How Tax Liens Affect Your Credit:

Having a tax lien on your credit report can have a detrimental impact on your creditworthiness. It indicates to lenders and creditors that you have a history of not meeting your financial obligations, which may make them less inclined to extend credit to you. This can result in higher interest rates, difficulty obtaining loans or credit cards, and even potential denial of rental applications.

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Additionally, a tax lien can lower your credit score significantly, making it harder for you to secure favorable terms on future credit applications. The negative impact can last for several years, even after the lien has been paid off or released.

Removing Tax Liens from Your Credit:

Fortunately, it is possible to have a tax lien removed from your credit report before the seven-year period expires. If you have paid off your tax debt in full or have entered into a payment plan with the FTB, you can request a lien withdrawal or release. Once the lien is released, it is essential to notify the major credit reporting agencies to update your credit report accordingly.

To request a lien withdrawal, you must meet specific criteria set by the FTB. These criteria may include making substantial payments towards your tax debt, complying with the terms of a payment plan, and demonstrating good standing with the FTB for a certain period. It is advisable to consult with a tax professional or seek guidance from the FTB directly to understand the requirements and process for lien withdrawal.


Q: Can I negotiate the removal of a tax lien from my credit report?

A: While you cannot negotiate the removal of a legitimate tax lien from your credit report, you can request a lien withdrawal or release once the lien has been satisfied.

Q: Will paying off a tax lien improve my credit score?

A: Paying off a tax lien can have a positive impact on your credit score, but it may take time for the improvement to reflect in your credit report. Your credit score is determined by various factors, and paying off a tax lien alone may not result in an immediate score increase.

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Q: Can I dispute the accuracy of a tax lien on my credit report?

A: Yes, you have the right to dispute any inaccurate information on your credit report, including tax liens. If you believe there is an error or the lien has been reported incorrectly, you can file a dispute with the credit reporting agency and provide supporting documentation to rectify the situation.

In conclusion, California state tax liens can stay on your credit report for up to seven years from the date they are filed. These liens can have a negative impact on your creditworthiness and financial opportunities. However, by fulfilling your tax obligations and following the necessary steps, you can work towards removing the lien and rebuilding your credit. If you have any specific concerns or questions regarding tax liens, it is recommended to seek professional advice from a tax specialist or the Franchise Tax Board.