All of us rely on our credit score to give us the ability to finance many things that make our lives easier. A healthy credit score can have a great impact on your quality of life, which is why your credit score should be something that you are always thinking about and monitoring. Everyone wants to have a healthy economic status and your credit score is the pathway to just that. You may be wondering if and how your taxes can be correlated with your credit score. Mark Dicus & Company is here to discuss the topic and show how these two are intertwined so that you can closely monitor them both.
Credit Score Factors
What makes up a credit score? It is vital that you understand what makes up your credit score so that you can have some control on that number that can affect your life so much. Your credit score is a number that lenders look at to know if they can lend you money in good faith that you will pay it back. Not only do lenders look at this number though, there are many landlords and future job opportunities that will also look at a credit score before trusting someone. Your credit score may seem like a number that is pulled out of thin air, but it is actually a calculation of your past spending habits based on several factors including:
– Payment History
– Credit Card Utilization
– Length of Credit History
– New Credit Accounts
– Credit Mix
How Taxes Can Affect Your Credit Score
Your credit score is affected when you don’t pay the financial obligations that you take on. When you don’t pay them, it has a negative effect on your score. Sometimes, you may find that you owe the IRS money. While paying taxes on items doesn’t really have any effect on your credit score, failing to pay a debt to the IRS will. The IRS is a large government agency that has power to get the money that you owe whether you want to give it to them or not. They can garnish your wages or put levies on your property. This can make things even more difficult for you.
Does the IRS Report to Credit Bureaus?
The IRS does not report your tax debt directly to consumer credit bureaus. In fact, the Taxpayer Bill of Rights protect your tax return information from disclosure by the IRS to third parties,
however, once a Notice of Federal Tax Lien has been filed, your debt becomes public record.
How to Pay Off IRS Debt
There are a few ways that you can handle debt that you owe to the IRS. Following are some of the possibilities:
– Credit Card: If you find that you are desperate, you can use credit cards to pay off IRS debt. This is not the recommended avenue though as you would be switching one debt for another.
– Installments: One of the easiest ways to take care of it is with installments. This is similar to a car loan or other payment you would have each month.
– Personal Loan: This is a good option when you need some time to get the loan paid off and can’t pay it in full. The interest rates are usually lower than the IRS offers.
Tax Preparation, Filing, Resolution & More in Summerlin, North LV, Henderson, Lone Mountain Village & Greater Las Vegas, Nevada
If you owe the IRS money and feel like there was a mistake made on your taxes, you can count on Mark Dicus & Company to help you get it sorted out and we can help you resolve your tax problems with the IRS. Call us today!