According to FICO (the Fair Isaac Corporation), a bankruptcy is worse for your credit than the other actions. Homeowners who go through foreclosure rather than a short sale tend to take longer to rebuild their credit (as foreclosures are generally caused by divorce, job loss, medical issues or other life events that cause financial stress). According to FICO, people who have gone through short sales see improvement in their credit scores in just two years.

What Will Foreclosure Do to My Credit Score?
A foreclosure will of course lower your credit score; how much depends on your credit score at the time of the foreclosure. In general, you can expect to lose 100 points or more. Lower credit scores prevent you from getting favorable interest rates in the future. Remaining current on your other debts will help maintain and build your score after the foreclosure.

Can I Get a Mortgage After a Foreclosure?
After a foreclosure, you can still establish good credit with a lender, but may be required to make a large down payment and will pay a higher interest rate. Depending on your lender, your score must meet their minimal requirements to qualify for the post-foreclosure loan. Paying your bills on time and consistently, with account balances low on a small number of credit accounts, will help rebuild your score after a foreclosure.

Can I Get an FHA Loan After Bankruptcy or Foreclosure?
FHA guidelines have reduced the waiting period to one year if you can show you went through a foreclosure or other detrimental action which was due to an external economic event, such as job loss, which was no fault of your own. You must also demonstrate that you have fully recovered, show that you were credit worthy before the incident, have no current late payments, as well as complete some one-on-one training with an approved housing counseling agency. Even then, it is ultimately the lender who will make the call on whether or not a borrower actually gets financed

How Will an HOA Foreclosure Affect My Credit?
If you fall behind in your HOA (Homeowners Association) dues or assessments, the HOA has the power to foreclose on your home, condo or townhome. Like any action detrimental to credit, your score will drop with an HOA foreclosure. HOAs send information to the credit agencies and will make sure the delinquent account appears on your credit report. Depending on your previous credit history and how the HOA foreclosure affected your credit score after the the action, you may still be able to apply for a mortgage at a later date. Just like any of the above factors, it all depends on how you maintain your credit afterward.

How Will a Foreclosure or Mortgage Default Affect My Military Security Clearance?
If you currently hold or are applying for a security clearance and have fallen behind in mortgage payments or are in foreclosure, your job could be at risk. The reason is this: Security clearance gives you access to confidential, secret and top secret levels. Under government guidelines, a failure of security-cleared workers to live within their means and pay debts suggests poor judgment, lack of self-control, and the inability to follow rules. As there are many factors involved leading up to default and foreclosure, the government can consider what you did or are doing to resolve them, if the conditions that led to the default or foreclosure were extenuating, and how quickly you resolved them. Each case will be reviewed to see what good-faith attempts you’ve made to fix your financial issues.

Source: Title365