Wednesday, December 31, 2014

Foreclosure vs. Short Sale Credit Impact


To clear things up…

FYI, as debated last night at the meeting which was fun, I was right as usual. Just don't usually have the time to prove it. LOL

http://www.myfico.com/crediteducation/questions/foreclosure-fico-score-affect.aspx

Both Short Sales and Foreclosures both stay on your credit for 7 years. There is only one thing that stays on a persons credit for 10 years and that’s bankruptcy. All other negative hits against credit including your judgments against a tenant or something as simple as a cable bill not getting paid stay on your credit for 7 years. 

However they all weigh differently on your credit and have greater and lesser of an impact. And there isn’t much of a difference between the two credit atom bombs, a foreclosure or a short sale.

So if you’re letting people know the benefits of a short sale vs. a foreclosure there are no big benefits pertaining to credit.

The big benefit is that the Obama administration during his first term made it so if a bank agrees to a short sale they can’t turn around and bang you with a deficiency judgement to get you for what they lost. They CAN do that with a foreclosure.

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