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Can I Get My Short Sale to Not Affect My Credit Score?

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How I Can Get My Short Sale to Not Affect My Credit Score?

Short selling allows you to avoid foreclosure on a home.

Unfortunately, there is no way to avoid the damage a short sale does to your credit score.  A short sale can knock as much as 160 points off your credit score.

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Like a foreclosure, a short sale is considered a derogatory item and it will remain on your credit report for seven years.

A loan that is paid by a short sale could be reported as a charge-off, a settlement, a deed-in-lieu of foreclosure, or “settled for less than the full amount due” on your credit report.

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.

To rebuild credit after a short sale, do everything you can to stick to credit-positive behavior.

Pay bills on time, keep credit card balances low and only take on new credit as needed.

If you have credit card debt, getting a plan to pay down those balances will help your credit score as well.  Your amount of debt accounts for 30% of credit scoring and lowering your credit card balances will help to improve your credit utilization and boost your credit score.

Getting your credit card balances down to less than 10% of credit limits is optimal for your credit score. And paying off credit card debt entirely is good for your wallet.

Monitor your credit and chart your credit recovery post-short sale with’s free credit tools. You will receive two free credit scores, with monthly updates, plus customized credit tips for improving your scores.

Keep close tabs on your credit by reviewing your credit reports from each of the three major credit reporting agencies — Equifax, Experian and TransUnion. You can request a free annual report from each by visiting

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  • dede123

    I went through a short sale 4 years ago. I continued to make my mortgage payments because I did not know how long it would take to sell and THEN get approved by the bank (or if the bank would approve). In my case, my short sale was approved in 30 days (lucky to go that fast). The problem with not making your mortgage payments while your house us up for a short sale, is that it could go into foreclosure before you sell it if it takes long to sell, and you do not want that to happen. In my case, when I ordered my credit report several months later, the short sale was on it, but my credit score went down only 50 points (from 760 to 710). I believe it did not go down any lower because I was never late on any payments of any kind and kept current on the mortgage payments.

    • Bill

      Great news for you!

  • Michael Czyzewski

    How do you define equity sharing?

  • LaTonya

    dede123, I appreciate your comment, it answered my question about how the short sale really affects your credit score. It’s great to hear it from someone that has actually gone thru it. I am about to be divorced and will probably have to do a shortsale. I am wanting out of the house kinda bad. I have been making my payments on time, and have never been late, so my situation is somewhat like yours. I’m wondering did you buy another house with the same finance company that did the short sale for you?

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