As if juggling lenders aren’t enough, there are other forces out there that can drop your credit score too. Tax and legal issues. If a creditor has sued you, it can damage your score and thus damage how you look in the eyes of creditors. Also, if you have a tax lien imposed by the state or IRS, creditors may wonder if this financial issue will affect your ability to pay back a loan.
A court judgment could affect how creditors view you. They may wonder whether or not you’ll be able to pay back loans.