So, who determines tax liens on credit reports? The three major credit reporting agencies: Equifax, Experian, and Trans Union. Each one is responsible for receiving information from credit grantors such as credit card companies, stores granting credit, mortgage companies, and banks. They compile your business credit history and compute your credit report scores. If tax liens on credit reports need to be filed, then the aforementioned three are the ones who lead the charge.

Business credit report scores are based on factors that appear in a firm's credit reports: bill payment history; total outstanding debt; types of debt; length of credit history; and credit inquiries. The Equal Credit Opportunity Act (ECOA) prohibits certain factors from being used in determining your credit report score; these include: personal details like sex, marital status, age, race, national origin; whether you receive public assistance income, as well as sources of income such as regular alimony, child support, or separate maintenance payments.

In order to avoid tax liens on credit reports, it's strongly recommended that you pay your bills on time and do not use charge cards unless you can make the required payments on time. For those deeply in debt, and at risk for tax liens, there are several ways to clear your name and get you finances together: transfer high interest debt to a lower interest consolidation loan; establish a personal budget; and remove inaccurate items from your credit report.

Seeking sound professional help is also a good idea if you're staring down a tax lien. They can chart a course that will help you pay off your debts and get your credit back on track. Remember, if you're running a small business, and need financing to make it grow, the last thing a lender wants to see on your report is a lien.