What Happens to My Credit if I Short Sale?

A short sale does impact your credit, but typically less severely than a foreclosure.

The Immediate Effect

When the short sale closes, your lender reports the mortgage as “settled for less than the full balance.”
That usually causes a credit score drop of around 100 to 150 points for most homeowners — depending on overall credit history.

Short Sale vs. Foreclosure

While both affect your credit, a foreclosure stays on your record for seven years, while a short sale often allows you to recover in as little as two to three years — especially if you’ve maintained good credit otherwise.
Many lenders tend to view a completed short sale as a sign that the homeowner took responsible action under hardship, rather than walking away from the property.

Rebuilding After a Short Sale

You can start rebuilding almost immediately by:

• Keeping all remaining accounts current

• Using a secured credit card responsibly

• Avoiding multiple new credit applications at once

The Good News

A short sale shows lenders you took proactive steps to resolve a difficult situation.
With consistency and time, most homeowners find they can qualify for a new mortgage much sooner than they expected.

Christopher Scott Realty Group
Professional Real Estate & REO Services — Central Florida
www.ChristopherScottRealtyGroup.com