Fair Issac says the average points lost on a credit score are as follows:
- 30 days late: 40 to 110 points
- 90 days late: 70 to 135 points
- Foreclosure, short sale or deed-in-lieu: 85 to 160
- Bankruptcy: 130 to 240
A short sale is no better or worse than a foreclosure or deed in lieu of foreclosure where your credit score is concerned, according to FICO. The negative impact of a short sale can be lessened if the lender does not report a deficiency balance, which is an amount owed after the property is sold. This term can be negotiated during the short sale process.
On your credit report, a short sale without a deficiency balance will appear as a settled debt. Settled means the lender accepted less than the full amount owed, and all settled debt reflects negatively on your credit score. Settled debt remains on your credit report for seven years from the date the account was reported settled. Likewise, a foreclosure remains on your credit report for seven years.
The higher your credit score is before you do a short sale, the more it may fall. Consumers applying for a short sale may already be financially distressed. If you have missed payments on your mortgage or other bills, your credit score may have already dropped. A short sale will cause less damage to a lower score.