How does a short sale affect my credit?


How Does A Short Sale Affect My Credit Score? This is a question we get often. Having a Short Sale on your credit score is easily recoverable and fairly minimal. The actual damage to the actual score is only about 50 points. – The same as if you missed a Mortgage payment.

However, besides the slightly lower credit score, the Credit Report will indicate the Short Sale. Some of the Government programs like FHA or Fannie Mae require up to a 3-yr period of having the indication of a Short Sale on the Report.

However, the best way to recover is to have 12 rent or mortgage payments on time every month. The credit scoring companies Experian, Trans Union Equifax now allow those on-time payments as part of credit repair.

So, you can recover completely from a Short Sale on your credit report by basically having 2 major and 1 minor credit card, used and paid partially or on time for 12 months, rent or mortgage payments for 12 months, and no liens or
past-due accounts on your record.

How Does A Short Sale Affect Your Credit Score?

Contrast to that, allowing the home to go to Foreclosure can be damaging for a very long time. It stays on your Credit Report nearly “forever”. It is 7 yrs before your credit report will allow you to get a score high enough to allow you
to use the credit score to purchase anything on credit, open new accounts etc.

Especially for younger people, a Foreclosure is quite damaging. And, for your lifetime, you would be unable to have a security job. Even TSA cannot hire anyone with a Foreclosure showing up on a score.

The Deed in Lieu – the 3 rd option, is pretty much the same as the damage from a Foreclosure. The difference is that you are just turning over your Deed to the bank. They require that you submit documents similar to those of a Short Sale and the lienholder does have to approve the Deed in Lieu process.

Hopefully, lienholders will create systems where Short Sales are always processed efficiently and the time it takes will be 6-8 wks maximum. We have banks, with certain loan types, who already do this. Right now, each lienholder has its own system and some are not very efficient.

So, for more details or to check to see if you might qualify for a Short Sale, contact us.

We always say – – if you have one of these mortgage issues, put away those tissues – – Reach out to Short Sale Advocates.LLC

Yvonne Wesa is the co-founder of Short Sale Advocates LLC, a short sales negotiating company and she is a Remax/Results Broker Associate. Since 2001  she has helped more than 400 homeowners successfully close on short sale properties. Over 85% of their business is helping Real Estate Agents negotiate their short sales. That real estate agent remains the listing or buyer’s agent on behalf of sellers and buyers. You can learn more about Yvonne Wesa at