A short sale has the same impact as a foreclosure. When the bank or lender reports your short sale to the credit bureaus, they generally treat both the foreclosure and the short sale as a delinquency. The credit bureaus, in turn, submit their information to Fair Isaac & Company, the people that compile the FICO score from your credit bureau records. FICO makes no distinction between foreclosures, short sales and deeds-in-lieu of foreclosure. In fact, they lump them all together and treat them as accounts “not paid as agreed.” Repairing your credit after a short sale will take time and discipline.
Pay your bills on time. FICO weighs recent credit history more than past, so a year or two of on-time payments can help erase a past filled with late pays.
Maintain low credit card balances. This raises your available credit amount, which helps you appear to have disposable income enough to take on more debt.
Keep old credit cards with good payment histories open. If you need to close credit card accounts, close the newer ones.
Use the credit cards sparingly, but do use them. Make sure that you can pay for the purchases during the next billing cycle. This will help build a history of on-time payments.