The Post You Have All Been Waiting For!

Wherein I reveal the impact of short selling our house on my credit score!


February 4, 2010 (just before the short sale hit my credit):

Note that this was a scale of 830. I used the same company to get my scores both times (TrueCredit) and today they gave me my scores using a scale of 990. Why??? If they thought to confuse me, they FAILED! I know how to do math, yo.

February 4, 2010 in percentages:

February 6, 2011:

February 6, 2011 in percentages:

Comparison:

So my credit score dropped an average of 12% as a result of short selling our house (with one missed payment at the end of the short sale process). I have no idea if this can be unilaterally applied to other people in the same situation; how they calculate credit scores is something of a mystery and predicting what the effect would be was one of the larger irritations during the process. NOBODY could or would tell me. But hopefully this is a general guide of what to expect for those of you going through (or considering) the process. 

Discussion:

What do these numbers really mean, though, when translated into our reality? 

I have spent my entire life hearing about the importance my credit score. What I failed to fully appreciate at the time, however, was that my credit score really only mattered if I wanted to borrow money.

So for someone who is now allergic to borrowing money, how has my less than stellar credit score affected me? To address that, I will go over a few of the scarier predictions:

Myth: You will have a hard time renting a place to live.

"Oh crap, we will have to live with my parents!"*

Fact: Not only did we have no problem getting approved to rent our current place (which is a very cute little house in a great part of town), they did not require any additional deposits and even accepted that we were self-employed (i.e. no predictable, regular paychecks).

Myth: Your credit card could be cancelled.

"Oh crap, how will we reserve plane tickets?!"

Fact: This was actually told to me by a credit repair company. As you might have guessed, our credit card was not cancelled. Why in the world would they do that?

Myth: When you move to a new city and set up utilities for your new rental, they will charge you a deposit to set-up the service because your credit isn't good enough to waive the fee and you don't have a history with the company.

"Oh crap, we'll feel looked down on by the customer service rep!"

Fact: This is the only way we have been impacted by our credit (and was actually not one that we were warned about in advance). But it was only about $100 and is refundable so...not really a big deal.

And now for the disclaimers...I am not an attorney or a certified financial planner; our story is factually correct but obviously anecdotal. That being said, I hope it helps those of you in similar situations feel more positive about the future!

~~~~~

* Just kidding! Love you, Mom and Dad! :)