Arizona Short Sale Doctor provides guidance to help you maintain the highest credit score possible. Everyone's credit profile is unique, but there are well-known ways to both improve and damage your credit score. We strive to minimize the negative impact of a short sale, and help you take positive action to improve your credit afterward.

How Credit Scores are Calculated

Credit scores are generated by plugging the data from your credit report into software that analyzes it by a credit scoring formula and cranks out a number. The three major credit reporting agencies don't  use the same formula, and don't even have all the same data, so expect the credit scores they generate to be different. That is why most lenders use a "Tri-Merge" credit report, based on all three credit agencies.

The software used to calculate a great number of credit scores was created by Fair Isaac Corporation--FICO. The pie chart above right shows a breakdown of the approximate value that each aspect of your credit report adds to a credit score calculation. Use these percentages as a guide:

35% - Your Payment History
30% - Amounts You Owe
15% - Length of Your Credit History
10% - Types of Credit Used
10% - New Credit

Every seller's credit profile is unique. In general, the higher your score, the harder you fall. That's because previously you probably had few if any negative items, while a person with only fair credit was already a known risk.

Different solutions to an underwater mortgage impact your credit differently. Depending on your credit profile, the damage to your credit will be approximately:

  50 - 100 Points - Short Sale
100 - 200 Points - Loan Modification
200 - 250 Points - Deed in Lieu of Foreclosure
250 - 300 Points - Foreclosure

Short sales and mortgage modifications do not actually hurt a credit score. It's the missed payments that lower a score. Credit scores will recover faster with these two options because they show effort on your part to help solve the problem.

While a foreclosure and deed-in-lieu of foreclosure will remain on your credit report for 7 years, short sales and loan modifications are not reported. In a short sale, the account will be noted as "Closed (Paid)", "Settled - Less than full balance", "Settlement accepted", or something similar, depending on the credit agency and how it was reported by the lender.

Arizona Short Sale Doctor Example

Here is an actual example from 2009. A homeowner had 3 homes, and Arizona Short Sale Doctor sold 2 of them in short sales. The short sales began in late 2008 and ended in early 2009.

The homeowner had an Experian credit score of 695 in December 2008. After both short sales were completed by March 2009, the homeowners Experian credit score dropped to a low of 623 in May 2009. One year later, the homeowner's Experian credit score was climbing back up, and was reported by Experian as 664 in April 2010.

Note that Arizona Short Sale Doctor sold 2 homes for this homeowner with a total of 3 loans, for a loss to the lenders greater than $450,000. Even though one home payment was 5 months late, the homeowner only experienced a temporary credit score loss of 72 points!

Sell Your Underwater Home and Buy A New Home Now

This has been done by many people. To learn if you qualify, and want results, discover how Arizona Short Sale Doctor can save you money and get you a new home. To get a free "prescription", at a time that is best for you, use the appointment request below for a confidential consultation.