Short Sale- How does it affect my credit score?

The effects of a Short Sale on Credit Scores

Unfortunately a short sale may effect your credit scores.  Make no mistake, the “ding” to your credit score can be very minimal (50 points) to much higher (150 points or more).   While a short sale can have less of or the same impact as a foreclosure on your credit, it has the benefits to your future financial health.  Please do not think a short sale will not effect your credit it will and it is irresponsible for someone to tell you otherwise.  Remember that how the short sale is reported can effect your credit score but equally important is how many late payments did you rack up while going through the process of a short sale.  No one can really predict the impact to your credit score but a short sale definitely can reduce the impact to your credit over a foreclosure.

There are many variables to how much your credit score will be impacted by a short sale.  The number of rolling late’s on your mortgage how your mortgage company reports the short sale to the credit agency as well as what your original credit score was.  It appears that the higher your score the harder your hit. These will be some of the factors in determining how much of an impact a short sale will have on your credit.

The other point to remember is, that many times, while struggling with your mortgage, you may be experiencing trouble with other lines of credit.  Every late you may have on credit card, car or student loan payments or any other line of credit, will impact your credit score.  The more late payments, of any type, that is reported to the credit bureaus, the more impact it will have on your credit score.  Many times by the time you are considering a short sale, a home owner will have already have had some serious impact to their credit score.

There is one significant difference between a foreclosure and a short sale.  A foreclosure stays on your credit for 7 years.  While your credit score may improve over time with both a short sale and a foreclosure, the foreclosure will be reported as a foreclosure and when applying for a mortgage and some other lines of credit they do ask the question if you have ever been foreclosed upon.  A foreclosure may impact your ability to get future credit in the intermediate term.

So, yes, a short sale will effect your credit, how much depends on many factors.

The bigger question to ask yourself is do you have another alternative?  For many underwater home owners a short sale may be the best and only alternative to an imminent foreclosure.  And, while yes, a foreclosure effects your credit there are other advantages to a short sale that makes it a better solution to a foreclosure.  Here is a recent article I wrote, Considering a Short Sale.

In a nut shell, if you are facing a future foreclosure and you see no way to stay in your home or it is not financially practical to stay in your home, a Short Sale is probably your best option, irregardless of the impact on your credit score.


    Fill out the form below if you would like to learn more about your options to avoiding foreclosure or Massachusetts Short Sales.


This post, Considering a Massachusetts Short Sale, was provided by Kevin Vitali of EXIT Group One Real Estate In Tewksbury MA.  If you are facing foreclosure, have missed mortgage payments or recieved your notice to cure you can contact Kevin by email at or call 978-360-0422.  Call a MassachusettsShort Sale Realtor that can help.  Don’t wait.

Short Sale Services in northeast Massachusetts, around the Merrimack Valley.  Short Sales in the towns of Andover, Billerica, Boxford, Chelmsford, Dracut, Georgetown, Groveland, Haverhill, Lawrence, Lowell, Merrimac, North Andover, Newbury, Newburyport, North Reading, Rowley, Tewksbury, Tyngsboro, Westford, Wilmington, West Newbury and surrounding areas


    Fill out the form below if you would like to learn more about your options to avoiding foreclosure or Massachusetts Short Sales.