A short sale is going to have a negative impact on your credit rating, there’s no question about it.
Many homeowners are already late on their mortgage payments anyway, so their credit rating has already been reduced by the late payments, and a short sale will add to it.
But most credit counselors will tell you that a foreclosure or a bankruptcy is going to have a bigger effect – a bigger negative effect on your credit rating, and is going to take longer to recover.
Recovery after a successful short sale can start to happen as early as 90 days after we start the transaction – after the transaction closes, and a successful credit counselor can help the homeowner sometimes repair their credit rating within as early as 18 months after the successful short sale.