There isn’t any standardized formula as to how a foreclosure or a short sale will affect your credit rating. However, you will probably to see a 75 to 175 point drop in your credit score after short sale. This point drop will show up on your credit report as a pre foreclosure in redemption status.  If you had any mortgage payments that were late more than 30 days your credit score will drop even further. It’s the late mortgage payments more than the short sale that has the most impact on your credit rating.

However, it is still better for your credit rating to do a short sale as opposed to a foreclosure that can drop your credit rating 200 to 300 points and will stay on your credit report for 7 years.