Does a Short Sale Cause Damage to Your Credit Score?


Quick Answer

A short sale used to satisfy a mortgage debt can damage one's credit score when the term "settled" is noted on the report, explains Realtor.com. This can lower a credit score and tells other creditors that the lender accepted less than the full value owed, possibly deterring future credit offers.

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Full Answer

While someone requesting a short sale can also ask to have the "settled" notation changed to "paid" to lessen the impact on his credit score, the lender does not have to agree, notes Realtor.com. If late and missed payments preceded the short sale, these act as a double whammy to lower the credit score further.

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