NMLS Credit Report Standard & Requirements

NMLS Credit Report Standard & Requirements

NMLS stands for Nationwide Multistate Licensing System or Nationwide Mortgage Licensing System. The NMLS functions as a record system for non-depository, financial services licensing or registration in participating state agencies, including the District of Columbia and U.S. Territories of Puerto Rico, the U.S. Virgin Islands, and Guam.

NMLS is the official system for companies and individuals wanting to apply, amend, renew, and surrender license authorities managed through NMLS. For those hoping to obtain or modify a license under NMLS authority, such as a Mortgage Loan Originator license, take note; NMLS requires the submission of a credit report.

Having questions about the standards and requirements regarding NMLS credit reports is understandable. It’s always best to ask questions and find the correct answers instead of wasting time and financial resources by going down the wrong route.

This guide will cover everything related to NMLS credit report requirements, including answering some frequently asked questions on the subject: Can you become an MLO with bad credit? What can get you disqualified? And more. Read through for a comprehensive overview on NMLS credit report requirements, or use the links below to navigate throughout this post:

Are MLOs Required To Submit A Credit Report? 

Yes. According to the rules of NMLS, every state-licensed mortgage loan originator (MLO) is required to use NMLS to complete the credit report authorization process. MLOs need to do this even if credit information was previously received by their state regulator(s).

Furthermore, individual control persons for state-licensed companies that happen to complete an MU2 Form may also be required by their state agency to use NMLS to authorize a credit report.

However, credit report authorization is not required for Federally registered MLOs.

How To Authorize A Credit Report

The authorization process is necessary for you to send NMLS your credit report. Let’s go over the steps required to authorize a credit report.

Step 1: Check to See if You Are Eligible

Before requesting a credit report, determine whether or not you are required to provide one. Most credit reports require payment, so it’s a good idea to verify the NMLS standards that apply to your licensure. As mentioned, Federally registered MLOs aren’t required credit report authorization.

Step 2: Determine Who Will Cover Fees

Many companies offer the option to pay for the credit report on behalf of the MLO or control person. Keep in mind that before making any payment and submitting, the company must be the one to initiate the credit report and then send it to the individual to attest and complete the Identity Verification process (IDV).

If the credit report request is initiated by the individual, they will be held responsible for associated fees. The cost for a credit report is about $15.

Step 3: Request a Credit Report

Please refer to Credit Report Submission Quick Guide (Company) for detailed instructions if the company is paying.

If a company is paying for your credit report, they will need to adhere to the following process outlined in the Credit Report Submission Quick Guide (MLO):

  1. Navigate to the NMLS Resource Center.
  2. Click the Log into NMLS button in the upper right corner.
  3. Click the Filing tab.
  4. Click Individual from the sub-menu.
  5. Search for the MLO by NMLS ID or First and Last Name.
  6. You will need to click either the Create New Filing button or the Edit icon if you have a pending filing outstanding.
  7. Click Credit Report Request from the left navigation panel.
  8. Select the “Request a new credit report” checkbox and click the Save button.
  9. Click Attest and Submit from the left navigation panel.
  10. Click the Request Attestation button

From here, the MLO will be contacted via email to log into NMLS and complete the appropriate procedures to attest to the filing and finish the credit report’s Identity Verification (IDV) process. For further information, individuals should consult the MLO Credit Report Submission Quick Guide instructions.

If you need to request a credit report on your own behalf, follow these instructions detailed in the MU2 Credit Report Submission Quick Guide (Individual):

  1. Navigate to the NMLS Resource Center.
  2. Click the Log into NMLS button in the upper right corner.
  3. Log in to individual account.
  4. Click the Filing tab in the top right corner.
  5. Click Individual on the sub-menu.
  6. Click the Review and Attest button to edit the MU2 form.
  7. Review all sections (the list in the left navigation panel) of the MU2 Form for accuracy.
  8. On the left navigation panel, select Credit Report Request.
  9. Click the icon in upper right portion of the sandbar to enable the completeness check.
  10. Select the checkbox to Request a new credit report.
  11. Click Save.
  12. Click the link entitled “Identify Verification (IDV)” prior to submitting this filing.
  13. Select the checkbox next to I agree to the TransUnion Smartmove Service Agreement.
  14. Click I Agree.
  15. Read the text on the Identity Verification screen. Be sure to review the information on the screen
  16. for accuracy before proceeding.
  17. Click Continue.
  18. Answer the identity verification questions and click Continue.
  19. Click Finish.
  20. Click Return to Filing.
  21. Click Attest and Submit on the left navigation panel to complete the attestation. A legal attestation will appear.
  22. Check the box verifying the attestation and click Submit Filing to submit the filing to your regulator.

Step 4: Complete The Identity Verification Process (IDV)

IDV is required to authorize the credit report by NMLS. The Identity Verification process involves answering a series of questions only the concerned individual knows. All questions should be answered personally by MLOs and control persons by logging into NMLS. Even if a company is paying, they cannot answer on the individual’s behalf.

Receiving a free annual credit report from www.annualcreditreport.com before beginning the credit report request can help resolve issues in the credit report.

In case of a security freeze not being lifted at the time of a credit report request, the MU4 (or MU2) Filing and payment made will be voided, requiring a resubmission once the freeze has been lifted. Do access TransUnion’s Security Freeze Page for information on lifting a security freeze.

Step 5: Regulator Review

Each state regulator will independently review the credit information. NMLS doesn’t enforce any automated standard or minimum credit score. Each state regulator is responsible for developing their own processes and standards, as allowed by the SAFE Act, for reviewing credit information and determining the financial responsibility of their licensees.

NMLS Credit Requirements: Frequently Asked Questions

Now that you have learned how to initiate the credit request process let’s talk about the frequently asked questions regarding credit requirements by the NMLS.

What are the credit requirements for NMLS?

NMLS doesn’t enforce any automated or minimum credit score. Due to the SAFE Act, it’s up to the discretion of each state regulator to develop processes and standards for reviewing credit information and determining the financial responsibility of their licensees.

Can you become an MLO with bad credit? 

The ability to become an MLO with bad credit depends on the state you apply to. States including Alabama, Florida, California, New Jersey, Ohio, Kansas, and Virginia are quite lenient. However, certain states like Wisconsin may disqualify you due to outstanding judgments. It’s best to contact your state’s licensing team if you’re worried about past bad credit stopping you from becoming an MLO.

What disqualifies NMLS?

You can be disqualified from the licensing process if you have been convicted of a felony. Charges including fraud, money laundering, or breach of trust can lead to a lifetime ban to MLO licensing.

You may also be denied if there’s been a felony conviction in the 7-year period before completing an application.

An applicant can be disqualified if they fail to demonstrate a lack of financial responsibility or a general lack of character.

Governmental jurisdiction revoking a person’s loan originator license also leads to disqualification.

Wrapping Up

We hope to have provided you with informative answers about the NMLS credit report process. It is suggested that you read the instructions published by NMLS to make the application process as smooth as possible. If background concerns exist, it’s advised to seek legal counsel before submitting an application.

If you want to gain a license, want to continue your licensing education, or have more queries about the NMLS process, Diehl Education is a reliable source to consider. With a team of trainers with over 20 years of experience, Diehl instructors know what’s required to help you gain or renew your license in states across the U.S.

We wish you good luck on your MLO journey!

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