Monday, September 26, 2011

What does Short Sale do to Credit & Credit FICO score vs Foreclosure

Audio Podcast that I liked.
How does a Short Sale affect Credit? << Click for Podcast Audio
from: Rob Stewart, Short Sale Realtor with Burbach Realty, Hope Consulting.
Q&A on Short Sales.
How does a short sale affect your credit & credit score?

Answer varies with one biggest question. What is your credit to start with? People that went into short sale being late on credit cards, late on car payments,  12 months late on mortgage, this was the first positive thing they did for their credit & their score actually went up. Credit bureau sees it is they are doing something actually positive to fix their financial situation, vs going into foreclosure & default.  People that have never missed a payment, but did short sale got hit pretty bad.

Average hit to FICO score is 75 points, but what you got to know what is far more important that hit on score is the affect that a foreclosure will do. Knock you 200-300 points, stay on records for 7 years, hard to rent, credit card may decline you. With a short sale will be on your record with FHA for about 2 years, and as long as you get your score back up and could potentially buy another home quickly, especially if everything else on credit is clean. Credit impact varies on a whole bunch of factors.

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