A lien is “a legal right or claim against a property by a creditor. Liens are commonly placed against property such as homes and cars so creditors can collect what is owed to them. Liens can also be removed, giving the owner full and clear title to the property.” (1)

Voluntary liens affect your credit score in a good way as long as you pay them on time. However statutory and judicial loans do just the opposite. They have a negative impact on your credit score and your ability to secure loans in the future.

Don’t ignore any liens you might have. It is hard to live in our society with bad credit. We need good credit for everything from getting credit cards, utilities, health and wellness services, and car loans, to buying a home or renting an apartment.

Let’s look at the types of liens that can be placed on a house and how to deal with them.

Voluntary (Consensual) Liens

A mortgage is a voluntary lien that you enter into knowing that you owe money to the lender. As long as you are paying your lender on time and there are no foreclosure proceedings, short sales, or deed-in-lieu situations, this type of lien is not going to affect your credit score. An auto loan is also an example of this type of lien. As long as you pay your car loan on time, your credit score is not affected in a bad way.

Most Americans who own homes or vehicles have this type of lien. A car loan, deed in trust, or mortgage can be a good tool to raise your credit score when you pay on time because it shows future lenders that you are using your credit responsibly. If you fail to pay on time, however, your credit score could plummet drastically, preventing you from using credit to borrow money at a reasonable interest rate in the future.

Statutory Liens 

Statutory liens can be placed by someone you owe money to. Almost anyone can file a lien on your property stating that you owe money, however, you can dispute the lien. To find out if you have any statutory liens on your real estate, you can go online to the county clerk’s office with your name and address. 

A statutory lien can cloud your deed (title) on your home making it difficult to sell, can affect your credit score, and can effectively prevent you from getting loans in the future. There are three types of statutory liens that can be placed on your property.

Mechanic’s Lien: 

If you hired someone to do a service for your home but did not pay them, they can file a statutory lien against you based on what you owe them. These types of liens are often from contractors or subcontractors who you may even have a dispute with. You might have mistakenly thought the dispute was over until you received a certified letter in the mail. 

If you pay the lien, the person who placed it has to release the lien within 10 days. However, you can dispute that you owe the money. Often, if you have an attorney draw up a letter declaring the legal problems with the lien, you can avoid having to meet them in court to dispute the lien. 

There are many ways that construction liens quite often fail to meet the letter of the law and thereby are easily dismissed when the claimant recognizes that an attorney will stick them with the actual mechanic’s lien laws in Texas. If they are faced with the fact that their lien won’t hold up in court, they can often be convinced to release the lien without a costly court battle.

Tax Lien

This is a type of lien placed by the state or federal government when you owe taxes that you have not paid. Unfortunately, these types of liens are difficult to dispute and can even involve garnishment of wages for repayment if you do not pay this off in a timely manner. Consult a tax specialist or attorney for more information on how to battle this type of lien.

Landlord (Contractual) Lien

Anytime you sign a lease to rent property, you are signing a contractual lien that allows the landlord to have rights to the property even though you are the one living there. Paying your monthly lease on time is another good way to keep good credit and even raise your score.

However, if you trash an apartment or condo and leave without paying a few months worth of rent, the owner can put a contractual statutory lien on your property and this lien can tank your score almost immediately.

Judicial Liens

Judgment liens can be imposed on your home by a judge when you lose a court case on a mechanic’s or landlord’s lien. If you have had a judgment in court against you and a lien placed on your home or property, you may be worried about the consequences to your credit. 

A judgment lien in Texas will remain attached to your home for ten years. After that point, it will be removed from your deed or title. However, during those 10 years that the lien is on your home, your credit score will suffer, it will be more difficult to sell your home, and you may have trouble getting additional loans or apartment leases.

Seek Help

If you are worried about the effects of a lien on your home, seek out the help of a knowledgeable and experienced real estate lawyer who understands the complexities of the lien laws in Texas. There are many ways you can fight an unjust lien, beginning with disputing with the claimant and ending with taking them to court if necessary. The worst thing you can do is ignore a lien and just let your good credit suffer. Find an attorney who will help you fight for your reputation and livelihood.


  1. https://www.investopedia.com/terms/l/lien.asp