How will it affect my credit score if I short sell my house without missing any mortgage payments versus missing payments prior to the sale?
The words "short sale" never appear in a credit report. It is a term used to describe how you sold your house. Your credit report will show how the mortgage account was closed. Rather than "short sale" an account status of "settled," or "settled for less than originally agreed" will likely be reported by your lender.
Any time a debt is not paid in full, it will negatively affect your credit. That is especially true for a mortgage.
Even if the account history shows that there was never a missed payment, the status of the account will likely still indicate that the account was "settled," or "settled for less than originally agreed."
If you missed payments prior to the short sale, those late payments will show in addition to the settled status. That could result in an even greater negative impact.
Make sure you have discussed all the options available with your lender before agreeing to a short sale. Be certain that you understand how the lender intends to report the account and the long-term implications for doing so.
While you will no longer owe the mortgage debt, you likely still will have difficulty qualifying for new credit, potentially for years afterward, even if you always made your payments on time prior to the short sale.
Thanks for asking.
The "Ask Experian" team