 TITLE: Can Not Paying or Delaying My Taxes Hurt My Credit? CONTENT: Ways Not Paying Your Taxes Could Hurt You\n-----------------------------------------\nYou could face serious financial consequences if you fall behind on your taxes. As you'll see, some of these issues might harm your credit in an indirect way.\n### You'll End Up Paying More\nLike most other bills, your taxes have a due date. That due date is generally April 15. If you owe an outstanding balance to the federal government and you can't pay it by this deadline, you may be charged a penalty for not paying all of your taxes on time. To make matters worse, the IRS will typically charge you interest on top of your unpaid taxes and penalty fees.\nPaying extra money in penalties and interest because you sent in your tax payment late could make it more challenging to keep up with the rest of your bills. If this happens, and if you fall behind on any credit obligations as a result, your late tax payment could indirectly have a negative impact upon your credit. Payment history is the most important factor in your credit score, counting for about 35% of your score, so late credit payments reported by your creditors can damage your credit quickly.\nOf course, late payments aren't the only risk to your credit when you become overextended financially. High credit card balances may also be problematic if they cause your balance-to-limit ratio, also known as credit utilization ratio, to increase.\nYour credit utilization ratio typically counts for about 30% of your credit score, so a high utilization rate of 30% or more can negatively affect your credit, even if you make your monthly payments on time. High utilization can be a sign to creditors that you're using too much credit and may be more likely to make late payments.\n### You Might Have Trouble Qualifying for a Loan\nYour credit reports don't show tax liens anymore, but that doesn't mean a tax lien can't cause you problems if you apply for a loan. In particular, when you apply for a mortgage, your lender may perform a public records search to find out whether you have any outstanding judgments or tax liens filed against you.\nYour best bet is to pay off your tax lien before you apply for a mortgage. Can't afford to pay the lien in full? Setting up a payment plan with the IRS might be enough to satisfy some lenders, if you can prove that you've made a sufficient number of consecutive payments.\nKeep in mind, if you set up a payment plan to pay your taxes, your lender will add your monthly payment to the IRS into your debt-to-income calculations. This means those lien payments could reduce the size of the home loan you qualify to receive. END