Does a Paid Mechanics Lien Decrease Your Credit Score?

Video Transcript

"Hi, my name is Matt McKillen. I'm with Innovative Financial Group. The question posed to me today was, "Does a mechanics lien or a paid mechanics lien affect your credit score?" First off let me explain what a mechanics lien is. Mechanics lien is when you have some type of work done on your home or your property and usually what happens is, is the contractor will record a lien against the property while they're doing the work and then upon full completion of the payment, what happens is is that, contractor at that point will release the lien of the property. Well the first thing I want to point out is majority of those liens do not get reported to the credit bureau agencies so they really wouldn't affect your score one way or the other whether they're paid or unpaid. The only time it may hurt you is that, if you have a lien on the property and you do not pay a, pay a contractor and he takes you to court and sues you, if he does receive a judgment against you, the mechanics lien won't report to the credit bureau but the judgment would. So in that respect it could ultimately hurt you, but dollar for dollar, the straight mechanics lien itself, either paying it or not paying it, the mechanics lien do not report to the credit bureau agencies and should have no effect on your score. Again, my name is Matt McKillen. I am with Innovative Financial Group."