Will a Short Sale Affect Employment?

This is a great question, and based on what I know about how short sales are reported today the answer is most likely NO it will not. A foreclosure, on the other hand, will definitely set off red flags to a current and prospective employer.

Current Employer
Many employers have begun working with the credit bureau to monitor their employees' financial health via their credit report. Why? Well, think of it this way, if you were a business owner and you had an employee that handled 'cash' wouldn't you want to know that they were in foreclosure? Financial institutions especially monitor their employee credit reports because they have access to very sensitive information. However, since a short sale does NOT have its own category on the credit report and it's only reported as a narrative today, it’s unlikely that it will be found derogatory with employer credit reviews.

Future Employment
A majority of companies pre-screen their prospective new hires by reviewing their financial health via their credit report before they make the final decision. Why? Same as above, if you were a business owner and you had two equally qualified candidates but one had $100,000 in credit card debt and the other had none, wouldn't you want to know which was debt free? Especially if they were handling 'cash' or sensitive information for your business. However, since a short sale does NOT have its own category on the credit report and it's only reported as a narrative today, it’s unlikely that it will be found derogatory via an employer credit review. This is how it stands today.

The status of how short sales are reported to the credit bureau may change in the future and the way employers look at short sales on credit reports may change as well, but today that is not the case and it works in the favor of those who sell short versus file foreclosure.

J.D.A