Q. We have to relocate because of my husband’s job. Our home value has fallen nearly $100,000. We would like to get rid of it, but we don’t want to go into foreclosure. Someone mentioned a short sale. What impact would that have on our credit rating?

A. A short sale, in which you negotiate with the bank to sell your home for less than you owe on your mortgage, will have a dramatically negative affect on your credit.

A consumer who has been through a short sale could see a drop in her credit score of up to 200 points, essentially the same decrease as if the homeowner had gone into foreclosure. And like a foreclosure, the negative mark will pull down the score for seven years.

That said, if you’re underwater on your mortgage and you need to move, a short sale is a better option than foreclosure. Going through foreclosure will make it very difficult for you to get a loan for at least three to five years; if you’ve done a short sale, you may be able to qualify for a new mortgage within two years.

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