This is the seventh article in my blog series on how lenders evaluate your credit score analysis when you apply for a home loan in Northern Virginia. Here is what we have covered so far: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6.
How Does a Short Sale Affect Your Credit Score Analysis?
Short sales are also a factor than many believe won't affect their credit report. However, they do have an impact. In a short sale, a homeowner’s bank loan balance is basically settled for an amount that is less that what a borrower has agreed to pay. It is listed on your report as being “settled” and can have a similar negative effect on your credit report as having a foreclosure. However, the negative mark that a foreclosure creates on your credit score analysis lasts longer than a short sale.
Credit Report Hits
Did you know that every time you apply for credit it generates a “hit”, or hard query, on your credit report? If a lender sees a lot of queries in a short period of time, it could raise a red flag. It may not be so bad for someone with a fairly good credit rating, however for those with bad, marginal or borderline scores it can make one look credit unworthy.
However, it’s a myth that getting pre-approved for a home loan through multiple loan officers dings your credit each time. Call me at 703-462-0700 or email me at DarrenRobertsonHomes@gmail.com to learn more about why this is the case.