Short sale transactions and foreclosures differ from one another in how they affect a homeowner’s credit report as well. When analyzing the differences between the two, consumers must realize that both processes will result in negative information being reported to credit reporting agencies. This means that this negative information will end up on the consumer’s credit report and affect their credit score. With a short sale, homeowners will see an impact on their credit score, even if payments on the loan are not missed. After the transaction takes place, lenders will report either “settled for less” or “paid in full for less than agreed” to credit reporting agencies. This notifies other potential creditors that you were unable to meet the mortgage obligation. Of course, when compared to foreclosures, it is easy to see that foreclosure have a more drastic negative impact on a homeowner’s credit score and credit report. The resulting drop in a consumer’s credit score will depend upon the total amount of payments missed. In many cases, foreclosure can lower a credit score by more than 200-400 points. Foreclosures also are listed on a homeowner’s credit report for seven years. Not only can a foreclosure keep consumers from being approved for credit in the future, but also some employers look at credit reports and will not hire individuals with foreclosure on their record.