A short sale could impact your credit scores as long as it remains in your credit reports, which may be up to seven years—similar to many other negative marks. If the short sale was preceded by one or more late payments, the seven-year timeline starts with the date of first delinquency that led to the short sale.
How long will a foreclosure affect my FICO score?
A foreclosure stays on your credit report for seven years from the date of the first related delinquency, but its impact on your credit score will likely diminish earlier than that. Still, it’s likely to drag down your scores for several years at least.
How does a short sale affect credit and credit scores?
According to the Fair Isaac Corporation (FICO), a short sale can have the same impact on credit scores as a foreclosure. Borrowers can expect to see their ratings drop by 85 to 160 points after a short sale. Credit scores significantly affect your ability to obtain the best rates available for any line of credit.
What happens when a mortgage is reported as short sale?
Rather than showing as “short sale,” the mortgage will be reported as “settled.” Any time an account is reported as “settled” it will hurt you credit history and credit scores. In terms of severity, a short sale, which is actually a settled debt, is almost as bad as a foreclosure.
How long does it take for your credit to recover after a short sale?
It takes time for your credit to recover after a short sale. Credit scores place the most emphasis on the most recent 24 months. So you can expect your credit score to slowly begin to recover in a couple of years or so.
How long does short sale stay on your record?
Like a foreclosure, a short sale is considered a derogatory item and it can remain on your credit report for up to seven years. It takes time for your credit to recover after a short sale.
