Short Sale vs. Foreclosure: Credit Impact Calculator

1. Why Short Sales are "Softer" on Credit: A foreclosure is a legal judgment that signals total default. A short sale is reported as "Settled for less than the full balance," which lenders view as a proactive settlement.
2. The "Wait Time" Factor: As your notes suggest, you can often qualify for a Conventional mortgage just 2 years after a short sale if you have 20% down, or 4 years with a lower down payment. A foreclosure typically requires a 7-year wait.
3. Protecting Your Professional Life: Many employers and landlords run credit checks. A foreclosure can disqualify you from certain high-security jobs or rental agreements in ways a short sale won't.

Don't let the bank make the decision for you. The score hit is temporary—the loss of control is what hurts most. Let’s talk about a strategy to keep your score as high as possible while settling your debt.

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