Since short sales can have very serious credit implications, sellers should take measures to try to reduce the impact of these implications on their credit. The following are a few tips that may help.
Tip #1 – Work to Raise Credit Scores Before the Short Sale
First, sellers can work to raise credit scores before the short sale process takes place to help reduce the implications of this transaction. Spend time learning how to increase the credit score and work to use this information wisely. Sellers can project the potential damage to their credit score and target to raise their score by that amount before the sale. For example, if the transaction may lower one’s credit score by 200 points, working to raise that score by 200 points before going through with a short sale may help.
Tip #2 – Work to Continue Making Payments
Another helpful tip that may help sellers reduce the credit implications of a shortsale is working to continue making payments on the mortgage even while working towards a short sale. Homeowners do not have to stop making payments to get a lender to agree to a shortsale. Avoiding missed payments will help sellers avoid the extra hit on their credit score, which can make a big difference after dealing with the drop in credit score that occurs after the short sale takes place.
Tip #3 – Talk to Lenders About How the Shortsale Will Be Reported
Lastly, homeowners may also want to talk to lenders about how the shortsale will be reported on their credit report. Negotiate to make sure lenders report the sale in the least damaging terms possible. While the short sale will still go on the credit report, less damaging terms can make a huge difference in how future lenders view consumers when they apply for new credit.