Kudos has partnered with CardRatings and Red Ventures for our coverage of credit card products. Kudos, CardRatings, and Red Ventures may receive a commission from card issuers. Kudos may receive commission from card issuers. Some of the card offers that appear on Kudos are from advertisers and may impact how and where card products appear on the site. Kudos tries to include as many card companies and offers as we are aware of, including offers from issuers that don't pay us, but we may not cover all card companies or all available card offers. You don't have to use our links, but we're grateful when you do!
Does a Lien Affect Your Credit Score?
July 1, 2025
Quick Answers
A property lien itself does not directly appear on your credit report and therefore will not impact your credit score.
However, the underlying unpaid debt that led to the lien, such as a delinquent loan or court judgment, is often reported to credit bureaus and can significantly harm your score.
Since 2018, tax liens and civil judgments have been removed from credit reports, meaning the public record of a lien is separate from your credit file.
What Is a Lien?
A lien is a legal claim against an asset that is used as collateral to ensure a debt is repaid. These claims can be initiated by creditors or government agencies when an individual fails to meet their financial obligations. For example, a common type of lien is a mortgage, where the lender holds a claim on the property until the borrower pays off the loan.
Because liens are public records, some types can be included in your credit report by the major credit bureaus. The presence of a lien on your credit history is viewed as a significant negative event and can substantially lower your credit score. Consequently, this can hinder your ability to secure future financing or credit under favorable terms.
How a Lien Can Affect Your Credit Score
While a property lien itself no longer appears on your credit report, the financial behavior that leads to one can severely damage your score. Here’s how that progression typically unfolds.
- Initial Delinquency: The process begins when you miss payments on a debt. Lenders report these late payments to credit bureaus, which negatively impacts your payment history and lowers your credit score.
- Collections Account: If the debt remains unpaid, it's often sold to a collection agency. A collection account is a serious negative mark that can stay on your credit report for up to seven years.
- Lawsuit and Judgment: The creditor or collection agency may then sue you to recover the debt. If they win, the court issues a judgment, which is a legal declaration that you owe the money.
- Lien Placement: The judgment allows the creditor to place a lien on your property. While the lien isn't reported to credit bureaus, the underlying collection account and missed payments that caused it remain.
- Future Lending Hurdles: Though not a direct credit score factor, liens are public records. Mortgage lenders and other creditors search these records, and an outstanding lien can be grounds for loan denial.
How Much Will a Lien Affect Your Credit Score?
The exact impact a lien has on your credit score depends on several factors. Understanding these elements can help clarify how much your score might change.
- Type of Lien: Different liens carry different weights in credit calculations. For instance, a tax lien is often viewed more seriously by lenders than a judgment lien from a civil lawsuit.
- Credit Reporting: Not all liens are automatically sent to the major credit bureaus. Only liens that appear on your public record and are subsequently reported will directly impact your FICO score.
- Payment Status: An unpaid lien will have a more significant negative effect on your score. Promptly paying the debt can lessen the damage, though the record may remain for several years.
How You Can Avoid a Lien Affecting Your Credit Score
Pay Your Bills Promptly
The most straightforward method is to consistently pay your debts on time. Fulfilling your financial obligations removes the legal grounds for a creditor to place a lien on your property, thereby safeguarding your assets and credit from any negative impact or public record.
Negotiate a Payment Plan
If you foresee trouble making payments, proactively communicate with your creditors. Many are open to establishing a payment plan you can afford. This good-faith effort can prevent them from escalating the issue to legal action, including the filing of a lien against you.
Dispute Inaccurate Claims
If a lien is filed against you incorrectly, it is vital to act swiftly. You have the right to formally dispute the claim. Gather your documentation and challenge the invalid lien to have it removed from public records before it can cause any damage.
Choose the Right Card to A Lien
Improving your credit score is an achievable goal that plays a crucial role in your overall financial life. With consistent, positive behavior, most people can see meaningful changes to their score in just a few months.
Monitor your credit reports. Obtain your free credit reports from the three major bureaus to identify and dispute any inaccuracies while tracking your progress.
Set up automatic payments. Since payment history is the most significant factor in your score, establishing automatic payments ensures you never miss a due date.
Lower your credit utilization. Aim to keep your credit utilization ratio below 30% by paying down balances or requesting credit limit increases on your existing accounts.
Become an authorized user. Being added to an account with a long history of on-time payments can give your score a boost, provided the account reports to all bureaus.
Diversify your credit mix. Lenders like to see that you can responsibly manage different types of credit, such as revolving credit from cards and installment loans.
Limit hard inquiries. Space out your credit applications and use prequalification tools whenever possible to avoid numerous hard inquiries in a short period.
The Bottom Line
While most liens no longer appear on your credit report or directly impact your score, the unpaid debt that led to the lien can still negatively affect your credit history.
Frequently Asked Questions
Does a lien always show up on my credit report?
No. Since 2018, the three major credit bureaus have removed all civil judgments and most tax liens from credit reports, so they typically won't appear.
If a lien isn't on my credit report, can it still affect my credit?
Yes, indirectly. Lenders check public records for liens during loan applications. An unpaid lien can result in a loan denial, affecting your ability to get credit.
Will paying off a lien improve my credit score?
Paying a lien won't directly impact your credit score since it's not on your report. However, it removes a significant obstacle when applying for future loans.
Supercharge Your Credit Cards
Experience smarter spending with Kudos and unlock more from your credit cards. Earn $20.00 when you sign up for Kudos with "GET20" and make an eligible Kudos Boost purchase.
Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
