Is It Possible To Become A Loan Officer With Bad Credit?
This Article On Can I Get Approved For An NMLS Loan Originator License With Bad Credit
Can I Get Approved For An NMLS Loan Originator License With Bad Credit is one of the most common questions we get at Capital Lending Network, Inc. Many people who want to pursue a career as a loan officer need to prepare to get their NMLS Loan Officer license. Many of those who want to pursue getting licensed as a loan officer want to make sure they will not have any hiccups when applying for state NMLS licenses after they have gone through the intense training and passing the federal NMLS MLO examination. However, when they contact the NMLS and/or the state mortgage regulator, they do not get a straight answer. Many people with prior bad credit do not want to go through the pre-licensing course and through hours and weeks of studying for the national federal NMLS examination. In this article, we will go over the general credit background investigation phase of the licensing process conducted by state mortgage regulators. One thing to keep in mind is that every state has their own criteria in evaluating a licensing candidate’s credit profile. Another thing to note is also up to the state licensing examiner in using their discretion in granting a loan officer licensing applicant a license with bad credit. There are certain states that are stricter on a candidate’s credit profile than others.
Can I Get Approved For An NMLS Loan Originator License With Bad Credit: What Credit Score Is Required By Regulated To Get An NMLS License Approved
One of the most commonly asked questions by loan officer candidates is what the minimum credit score requirements. Each state has their own credit profile standards for candidates who are seeking NMLS licenses. However, most states are not too concerned with credit scores. They are more concerned with derogatory credit tradelines. A credit report is pulled by the NMLS when you apply for your MLO NMLS license. There are states where it is more strict with derogatory credit tradelines than other. However, it is ultimately up to the licensing examiner to decide whether the bad credit of a NMLS licensing applicant merits. a state NMLS license or the candidate has displayed financial irresponsibility due to their bad credit. California has one of the most lenient standards when it comes to getting a NMLS MLO license with bad credit. I have seen loan officers with large outstanding collections, judgments, charged off accounts, late payments, repossessions, foreclosure, and other derogatory credit tradelines and still get approved. Other states like Texas have denied NMLS MLO applicant with credit scores in the high 700’s due to having a collection and/or charged off accounts from many years back. Each state mortgage regulator will independently review the credit information of MLOs licensed in their jurisdiction. Therefore, if California had an individual mortgage examiner who had issues with candidates with bad credit, the individual particular applicant may have an issue with getting a NMLS MLO license in California. This holds true when other candidates did not have any issues getting a MLO NMLS license approved due to having been assigned an examiner with more compassion for candidates with bad credit. However, in general, California approves most NMLS MLO licensing applicants with bad credit including outstanding collections and/or charged-off accounts.
How State Licensing Examiners Review And Approve Credit Profile Of NMLS MLO Candidates
All new mortgage loan originators require their credit check by the NMLS. The credit report of the loan officer applicant is stored on the NMLS database for regulators to have access to your credit report on states you are applying for your state NMLS license. The NMLS will pull a Transunion credit report. It will be a soft pull so no need to worry about dropping your credit score due to a hard inquiry. There are no written guidelines and/or standards or credit score requirement developed by the NMLS and/or state regulator. They leave the examining regulator of the licensing applicant full discretion in determining the applicant’s financial responsibility standards to merit a NMLS MLO license.
Here is the guidelines on how state mortgage regulators evaluate and review a NMLS MLO licensing candidates financial responsibility when reviewing their credit report:
The SAFE Act requires that mortgage loan originator applicants have, “demonstrated financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that applicants will operate honestly, fairly, and effectively.” The SAFE Act leaves it to the discretion of each state regulator to develop their own processes and standards for reviewing credit information and determining the financial responsibility of their licensees.
In the following paragraph, we will go over concerns NMLS MLO licensing candidates have. We will go over on how to make sure that you will not any issues in getting your NMLS MLO license.
How To Get Approved For A NMLS MLO License
If you have outstanding collections and/or charged off accounts, the state licensing examiner may require for you to pay it off in order for you to be eligible for licensing. Another option you have is to enter into a written payment agreement with the creditor. Written payment agreements on unpaid collections and/or charged-off accounts will be viewed favorably by state regulators and you will get approved. If you have a lot of outstanding collections, charged off accounts, judgments, and other derogatory credit tradelines, you may want to consider filing bankruptcy. Bankruptcy is a federal law that give consumers a fresh start. It is better for you to have a bankruptcy than have outstanding collections, charged-off accounts, judgments that has not been addressed and is just sitting out there. You will not have any issues getting your NMLS state license in any states with a bankruptcy. A bankruptcy will clear out most debts unless they are debts that are government debts and/or debts due to fraud.