Which is better for my credit score, a short sale or a foreclosure?
They both have the same affect on your credit score. A foreclosure does not penalize your FICO score more than a short sale according myfico.com. There are some people who think a foreclosure is worse to their credit score than a short sale. Credit score aside, there are other financial issues to consider when defaulting on your mortgage. If you are in danger of loosing your home, you need to seek qualified legal and financial advice.
If you have any questions about Tigard real estate, give me a call. You will get straight answers with no sales pitch.
Wayne B. Pruner, GRI 503-891-0795 email: waynepruner@oregonfirst.com
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UPDATE: The above post is information from MyFICO.com. This is the authority on credit scores. I posted this same article on my Active Rain blog and received contrary comments. Read it here. There are always two sides to a story and sometimes it’s tough to know which way to go. The general consensus from Realtors and loan officers, is that a short sale is less detrimental to your credit than a foreclosure.
In terms of credit scoring there is only a very small difference between the credit hit you will take on a short sale vs a foreclosure. The biggest difference is the time before you can buy another home. When doing a short sale you will be able to buy again years sooner as long as you work on raising your credit score.