WHAT ABOUT MY CREDIT?

There are many ways in which a foreclosure or short sale can affect your credit score. If you are careful, a short sale can have less impact on your score as compared to a foreclosure.
Your Credit and The Short Sale – A short sale can have less impact on your score as compared to a foreclosure if you do these things:

• Negotiate a short sale with your lender without having missed any mortgage payments.
• During these negotiations, as the lender to report the sale as “paid in full”
• After closing the short sale, the credit score might be lowered by 50-100 points as long as all your other payments are made. This impact can be as little as 12-18 months.

The short sale must be approved by the lender, which means you will have to send them information about your financials. You might not get a quick approval, so if you have cash flow issues, you might have trouble making all your payments. It is also possible that your lender will think you do not qualify for a short sale.

Your Credit Score and Foreclosure – A foreclosure impacts your credit score in a more negative way than a short sale.

• Late payments that occur before the foreclosure have a large impact on your score.
• FICO, which is the agency that calculates credit scores, protects their scoring system. It is estimated that your score can drop from 175-300 points due to a foreclosure.
• This will impact your score for more than three years, and stay on your report for ten years.

Try to keep other accounts current – Your score can bounce back faster if you keep all the other accounts current. A short sale can help you get through this stressful time, but is just one option. Our expert team members can help you figure out the best solution for your needs.