Every day, for the next week, I plan to post the consequences that will impact a homeowner should they, by circumstance, have to choose one of the the two alternatives (either a loss by short sale vrs. a loss by foreclosure).
Today's subject is the impact of both on a CREDIT SCORE
FORECLOSURE MAY LOWER A CREDIT SCORE ANYWHERE FROM 250 TO OVER 300 POINTS. TYPICALLY THIS REDUCTION WILL AFFECT A SCORE FOR OVER 3 YEARS.
A SUCCESSFUL SHORT SALE WILL LOWER THE SCORE BY AS LITTLE AS 50 POINTS IF ALL OTHER INSTALLMENT PAYMENTS ARE BEING MADE. A SHORT SALE'S EFFECT CAN BE AS BRIEF AS 12 TO 18 MONTHS...AND THE LATE PAYMENTS THAT GOT A SELLER TO THAT PLACE WILL BE REPORTED AS PAID OR NEGOTIATED.
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