The term short sale does not appear on a credit report. The term short sale describes negotiating settlement of your mortgage debt for less than originally owed. Rather than showing as “short sale,” the mortgage will be reported as “settled.” Any time an account is reported as “settled” it will hurt you credit history and credit scores.
In terms of severity, a short sale, which is actually a settled debt, is almost as bad as a foreclosure. It is going to have a serious impact because you didn’t fully repay the largest debt most of us ever have. The amount of the impact depends on your credit history and on the scoring system used by the lender, but it will have a very serious negative affect on your credit for a number of years.
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Scoped on: 08/02/2016