Credit Impact??

[n2deep]

What is the effect of a Deed in lieu as opposed to a short sale on your credit? Which one will look worse, if not both?

[Anonymous]

Both will really lower your score.  A deed in lieu is bascially the same as a foreclosure so it will have a lerger impact overall, but both willl have similiar impacts on your FICO.  If you are at 620 and 530, I would probably guess 75 point drop or so (just a guess really).  The deed in lieu will probably have more long term consequences as far as getting another home loan in the future as it is a foreclosure for all intents and purposes.  The short sale (if you have not missed payments), will leave you in a better position down the road to buy again.

[Anonymous]

Just to clarify though, at your current score level, your credit is going to be ruined for quite awhile either way.  If there is no way for you to keep the house, the best thing to do may be to just stop paying and stay in the house as long as you can (while building up some resources).  While this is not the most morally repsonsible thing to do and may do the most damage to your FICO, when FICO is already somewhat low and there are no other options for you to fix the problem, sometimes that makes the mopst financial sense.  In any case, just make sure that FICO is not your primary concern when dealing with having to let a house go/foreclosure/walking away.  The biggest thing should be avoiding it in the first place.  If that is not an option, then you should look at what puts you in the best position coming out of it and ignore FICO.

[n2deep]

Thank you so much for the quick responses. I know that they would both be pretty bad, what does the recovery look like though. How long do these stay on my credit? Foreclosure vs. Short sales? Are they public records?