If you’re thinking about putting your home on the market, you might be wondering if selling your house affects your credit score. The simple answer is yes. Selling your home could impact your credit score, though perhaps not in the way you think. For instance, selling house won’t negate the payment history associated with its mortgage, though the move could influence your ability to pay down other debts. Plus, there are serious credit score consequences if you’re short-selling your home. Let’s take a look.

Will the Sale Impact My Payment History?

Having a mortgage with a positive payment history is a big plus for your credit. When you sell a home and pay off a mortgage in full, the paid mortgage will stay on your credit report for 10 years from the paid date.

However, that means any negative information from your mortgage payment history will stick around as well. Negative information, such as a missed mortgage payment, remains on your credit report for seven years. So, it’s important to note, even after you sell a house, the impact of how you paid your mortgage can impact your credit for years to come.

Remember, credit scores are created by analyzing data from credit reports, including factors like how much debt you’re carrying and whether you’ve historically paid your bills on time. In fact, your payment history is key in factoring your credit score. It accounts for roughly 35% of your overall score; 30% is based on the amount of money you currently owe creditors; 15% on your credit history, or how long you’ve had credit accounts; 10% on your mix of credit accounts (secured, like a mortgage, versus unsecured, like a credit card); and, finally, 10% on how often you apply for new credit.

Can the Sale Raise my Credit Scores?

If you sell your home and obtain a mortgage for a new home, you have the opportunity to continue benefiting from keeping a good payment history on a current mortgage. Over time, this can raise your scores.

However, if you sell your home and choose to rent and therefore do not carry a mortgage anymore, it won’t hurt your credit, but it also will not raise your score.

You might also decide to pay down existing credit card debt if you’re able to allocate some of the funds from the sale of your home.  Paying down revolving debt can raise your credit scores, especially if you are using a high percentage of your available credit.

Can the Sale Hurt My Credit Score?

One way that selling your home can negatively affect your credit is by opting for a short sale. A short sale means you sell your home for less than you owe on the mortgage.

Selling your home in a short sale will cause your credit to drop significantly — up to 160 points, depending on where your score was at the time it hits your reports. It’s important to consider your options carefully before you decide, and be prepared to work over the next several years to re-establish better credit if a short sale is your best option.

Staying current with your other payments and paying down credit card debt are good strategies for lifting up your credit score over time. You can track your progress through Credit.com, where you can get a free credit score.