Last Wednesday I found a letter from the New York State Department of Taxation and Finance dated March 2007 that confirmed a $103 tax lien on my credit record. (Essentially this lien was placed against me, including penalties and interest, because I didn’t pay $73 in state taxes in 2002 and my property became collateral.)

Luckily TransUnion verifies I paid off the lien in June 2007. But I’m frustrated I let such a small debt (less than a monthly Metrocard!) contribute to a credit score so low that my FICO report doesn’t even include it on a chart that displays various interest rates for a mortgage (based on score).

I find it hard to believe there’s nothing that can be done to improve my credit. So I called experts to get their advice.

I reached out to TransUnion to find out straight from the source. Steven Katz, a TransUnion spokesman, wrote me in an email that a tax lien stays on an individual’s report for seven years “from the date it is released” or “the official recognition of payment”. When it comes to unpaid liens, he said, they could stay on your report indefinitely.

I also spoke with John Ulzheimer from Credit.com, a credit web site run by the former director of the New Jersey Department of Consumer Affairs. John writes about credit scores and reports and once worked at Equifax, another credit reporting agency (like TransUnion). He had smart recommendations for what I can do while I wait until 2014 for the paid lien to be removed. He suggested I pay off balances, make sure I always pay bills on time and be sure to pull my credit report a month after any disputes or changes to see if an improvement has been made.

“From a scoring perspective, you can out-compensate by doing really well with credit card debt,” he said. That’s great to know.

“There’s value to having time—you’ve earned back a great number of points because [the paid lien] is three years old,” he said.

I also asked John why a tax lien negatively affects your score, even if it’s paid. “Paying off the lien doesn’t help,” he said. “That can be frustrating to people, but lenders find government debts to be problematic because they cause [the lenders] to go through a judicial process [to loan you money].” It’s good to at least understand where this is coming from.

I’m working hard to learn from this experience and the feedback I’ve gotten. I only have one installment of approximately $60 left to the debt management company that has already helped me settle two credit card debts. After that I will only have one open credit card, which currently has a balance of $3,669; I’ve made payments to it on time every month since I’ve had the card and use it infrequently. I’m also developing a plan to pay that balance down.