Do I need to worry about an unpaid property (auto) tax bill being on my credit report?
December 16, 2008 6:14 PM   Subscribe

Do I need to worry about an unpaid property (auto) tax bill being on my credit report?

I received a bill in the mail for a back (auto/property) tax that I was unaware of. I was moving or had moved right around the time they tried to send it to me. So, over 1 year later, I received a collection letter from a law office.

I told them I would pay in full, but requested something in writing that this would not appear on my credit report, since this was the first bill I had ever received. They would not give me such a letter. I pulled my credit reports and nothing is on there, yet.

What should I do? Should I just pay it and hope for the best? Do property tax bills even go on credit reports?

I just don't want anything regarding this appearing on my (perfect) credit report.
posted by hazyspring to Work & Money (12 answers total)
Are you saying that, if there are no negative repercussions to not paying a bill you're legally obligated to pay, you won't pay it?


To address your stated question, though, property taxes typically do not show up on the part of the report that shows your accounts/credit lines/etc. There is a "public records" section, however, of the report, where it would show that you have failed to pay property taxes and/or have a tax lien. This will affect your FICO score.
posted by pecanpies at 7:24 PM on December 16, 2008

I'd try demanding a guarantee from the collection agency/law firm again. They usually don't get 100% of the amount owed (they buy up these debts at a discount). If you call `em up and hem and haw about your ability to pay the full amount... but you'll try extra-hard to pay it all if they can give you something in writing that this won't be reported to any credit agencies... that might do the trick.
posted by DavidNYC at 7:27 PM on December 16, 2008

Also wanted to add that as part of my job I regularly review credit reports in detail, probably adding up to several hundred a year. Finally, here's an article from the Motley Fool that briefly touches on the subject:

I'd pay the bill.
posted by pecanpies at 7:28 PM on December 16, 2008

Pecanpies: I got the sense that the questioner wanted to make sure that s/he wouldn't suffer (apparently unjust) negative consequences even if s/he DID pay in full. There's no reason why the collection agency can't promise not to report this if the amount is paid in full, which strikes me as the right outcome, if indeed the original bill never made it to hazyspring.
posted by DavidNYC at 7:30 PM on December 16, 2008

And let me just add that yes, if the collection agency refuses to give any guarantees no matter what, then of course pay the bill & hope for the best.
posted by DavidNYC at 7:31 PM on December 16, 2008

To comment on what David is advising, I wouldn't trust the collection agency's promise that nothing will appear on your credit report. Tax liens stay on your report for years, and it is very, very difficult to get something off your report once it's on there, even if it's been added in error. Finally, the state tax board, not the collection agency, would report the tax lien to the credit reporting bureaus. If anything, I would deal directly with whoever is actually trying to recover the money, not just the collection agency they've hired to do it.
posted by pecanpies at 7:32 PM on December 16, 2008

David: Reading over the question again, not sure how I missed it when the OP said he intended to pay the bill in full. My bad.

To the OP: Apologies for misreading your post (and your intentions).
posted by pecanpies at 7:34 PM on December 16, 2008

Indeed, I wouldn't trust it, either - but at least getting something in writing gives you a leg to stand on in case they do report you to credit agencies. (An oral promise is worthless.) It's better than having nothing at all.

As for "dealing directly," that's not always possible. Oftentimes these debts are sold outright, so the original party no longer has an interest in them. The money that's collected goes to the buyer of the debt, not the original party. Though it's an avenue that might be worth exploring.
posted by DavidNYC at 7:35 PM on December 16, 2008

Re: not being possible to deal directly with the debtor - of course that's the case for consumer debt, mortgages & the like, but I didn't know if that was the case with money owed to the government. If so, then you are absolutely right - it would only make sense to deal with the collection agencies.
posted by pecanpies at 7:39 PM on December 16, 2008

I fully intend to pay the bill either way, I'm just trying to figure out how to protect myself best, since this was truly an honest mistake.
posted by hazyspring at 7:42 PM on December 16, 2008

Gotcha. Apologies again for the misunderstanding.

You do know that you can order 3 credit reports a year for free (1 from each of the 3 bureaus), right? It's at I would pay the bill as soon as possible after obtaining something in writing that the collection agency and/or original debtor won't report this to the credit bureaus. I would then pull my report every 4 months for a year to make sure it wasn't appearing in the "public records" section.

FYI, inquiries into your credit report do hurt your FICO score ever-so-slightly (we're talking a couple of points). Just mentioning this in case you have a tendency to overreact (which I certainly do, especially when money's involved) and were considering pulling your report each month or on a more frequent basis than 2 or 3 times a year.
posted by pecanpies at 7:50 PM on December 16, 2008

Update: I called the state directly today. Turns out I may not even owe it or owe the full amount. I have to mail them all of this documentation.

Still no clear cut answer from them on the credit report, but I'm definitely not going to pay the law office. If anything, I'll mail a check to the state.
posted by hazyspring at 10:02 AM on December 17, 2008

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