Ever wondered how taxes affect your credit score? If you've paid your taxes this year, here's the answer.
Tax bills do not directly affect your credit score. However, how you pay your taxes and failure to pay can hurt it.
If you've used credit to pay your taxes or failed to pay your taxes in full, then it can affect your credit indirectly.
Paying by credit card can be convenient, but you'll end up paying interest on your card's high interest rate.
If you use a personal loan to pay your taxes, you need to plan in advance. Make payments on time to avoid pitfalls.
When you pay your credit card balance in full and on time, it helps improve and boost your credit score.
Using a personal loan also helps add to the credit mix and monthly payments help your credit score grow.
The IRS also offers installment agreements. They are not considered loans and don't affect your credit score.
Remember while there is no direct bearing on your score, using credit to cover tax payments may affect it indirectly.