Facts about Short Sales:
Effects of Short Sale on your Credit Report:• 200-300 point reduction on your FICO score, depending on the borrower.
• Inability to obtain a mortgage for at least 24 months.
Effects of late payments on Credit Report:• 30-60 day late payments: an “isolated occurence” (do not have 30-60 day late payments on multiple accounts) does not cause long term damage to your credit.
• 90-120+ day late payments: drop credit score for the long haul (around 7 years).
Effects of Collections (post Short Sale Deficiencies) & Debt Settlement• Credit score will suffer with both; with debt settlement, however, you’ll eventually repay your debt and thus helping to rebuild your credit score
• Do not simply leave your debt hanging with collections in hopes that they will charge off the loan. They will continue to report that you are in default of “installment payments,” etc. They can do this for years. It is better to settle your debt and move on. You especially do not want additional 90 day late payments reported as your credit score at that point will drop significantly.
For more information, feel free to contact us at (425) 889-9300 or @ ScottWeitz@weitzlawfirm.com.
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