Does Your Credit Score Affect Your Tax Refund?

You must pay your taxes every year regardless of your credit score.

You must pay your taxes every year regardless of your credit score.

Navigating the intricacies of your yearly tax return can be a daunting challenge even to the most seasoned filer. One thing you shouldn't have to worry about is whether or not your credit score will impact your return. Credit scores and tax returns are almost completely unrelated, and you don't have to worry about a good or a bad score affecting your tax refund check or how much you have to pay in taxes.


Most states and the federal government require income earners to pay income taxes every year. The amount of taxes you have to pay depends upon a wide variety of factors, such as your income level and what deductions you qualify for. State and federal tax codes determine how much each person owes, and if you pay more than you have to, you are entitled to a refund. How much of a refund you get depends on your circumstances, and you must file a return before you can get your refund check.

Credit Scores

Whenever a lender wants to know if a borrower is a good prospect for receiving a loan, one of the primary factors that creditor looks at is the borrower's credit score. Your credit score represents your history in handling previous types of credit, such as car loans, mortgages and credit cards. If you have been a responsible borrower, you will have a high credit score, while if you've used credit poorly, such as by failing to pay your bills on time, your score will be low. Each lender determines what makes a good or bad credit score, and there are numerous types of scores a lender can look at, but all of them are used to represent your credit worthiness as a borrower.

Scores and Refunds

The federal government, and to a lesser extent each of the state governments, is responsible for issuing your yearly refund check if you are entitled to one. The government does not consider your credit score when issuing you a refund. Instead, the only calculation the government makes is whether you have paid more taxes than you should have and, if so, how much you need to be refunded. Your credit score has no effect on this calculation.

Refunds and Scores

Whenever you pay more taxes than you owe the government keeps that money until it pays your refund. It's always better to keep your money and use it for your own purposes rather than rely on the government to pay you back at some later date. You can, for example, ask your employer to decrease your withholdings by filing a new W-4 form. With the increased income you can, for example, pay off your bills on time or pay off your outstanding debt. This will increase your credit score, thus making you a better candidate for new loans or for better loan terms.


About the Author

Roger Thorne is an attorney who began freelance writing in 2003. He has written for publications ranging from "MotorHome" magazine to "Cruising World." Thorne specializes in writing for law firms, Web sites, and professionals. He has a Juris Doctor from the University of Kansas.

Photo Credits

  • Comstock/Comstock/Getty Images