How does a foreclosure or short sale effect my credit score

The fico people explain the effects of a short sale on your credit are very similar to a foreclosure. (Please note this deals with your computer score. When you speak with investors and investment bankers you may find out they prefer to see a workout in your credit history over a foreclosure.)


The following answer is straight form the horses mouth. The fair issac people.

Answer

How does a foreclosure or short-sale affect my score?
Question
How does a foreclosure or short-sale affect my score?
Answer


Credit bureau reports are limited in how they represent foreclosures today, so it's generally not possible to tell from the credit report if a reported foreclosure is a short sale, deed in lieu of foreclosure, settled account, regular foreclosure, or some other variation.

The FICO® score treats all of these descriptions that appear on credit reports as serious delinquencies, so they have an impact on the score similar to the impact from a charge off, tax lien or account included in bankruptcy.

http://myfico.custhelp.com/cgi-bin/myfico.cfg/php/enduser/std_alp.php?p_sid=o*8fKEwj&p_lva=253&p_li=&p_accessibility=0&p_redirect=&p_new_search=1&p_search_type=answers.search_nl&p_sort_by=&p_page=1&prod_lvl1=111&p_pv=1.111&p_prods=111


for more on short sales