Can You Become A Loan Officer With Bad Credit And Get Licensed

California NMLS Licensing

This Article Is About Can You Become A Loan Officer With Bad Credit And Get Licensed 

A career as a mortgage loan officer can be extremely rewarding.

  • However, there are steps in becoming a licensed loan officer
  • Once you have accomplished those steps, you will have great career opportunities as a loan officer with the many great mortgage companies who are in major need of loan officers
  • We will cover the necessary steps in becoming a mortgage loan officer
  • Especially the mortgage licensing requirements
  • One of the most asked questions by many mortgage loan originator recruits is ” Can You Become A Loan Officer With Bad Credit”

I will cover this topic in-depth and will tell you about my personal experience when I went through the mortgage licensing process with bad credit.

How To Become Licensed As Loan Officer

How To Become Licensed As Loan Officer

Becoming a licensed mortgage loan originator is different than becoming a licensed professional in any other field

  • This because every mortgage loan originator applicant goes through an intensive credit background check

Attorneys, real estate agents, stockbrokers, financial planners, accountants, doctors, dentists, nurses, teachers, and other professionals do not go through credit background investigations by federal and state regulators like licensed mortgage loan officers.

Mortgage Regulations

I cannot think of any other profession where federal and state regulators require credit background investigations:

  • Every state regulator a candidate wants to apply for a license will review the licensee’s credit report, credit payment history, and credit scores other than a licensed mortgage loan originator
  • The main reason that mortgage loan originators go through a credit background check is because the government decided that a loan officer’s credit is important in determining whether they warrant financial responsibility
  • A candidates credit is deemed whether a mortgage loan originator has financial responsibility
  • By reviewing candidates credit and credit payment history, regulators determine whether or not they are fit to be a licensed loan office

Many disagree with this.

Getting NMLS License Due To Derogatory Credit Tradelines

This because hard-working people in general can go through a period of tough times such as the following:

  • periods of unemployment
  • loss of business
  • divorce
  • periods of health problems
  • or other extenuating circumstances where their income stream is halted or disrupted where it affects their abilities to pay their bills on time

Can You Become A Loan Officer With Bad Credit After The 2008 Real Estate And Mortgage Meltdown

The Great Recession of 2008 has affected millions of Americans.

  • Countless of hard-working Americans has lost their businesses, lost their jobs, and whole industries got eliminated
  • Real estate professionals were the single largest group of professionals who got affected by the real estate and mortgage meltdown of 2008, especially mortgage loan officers
  • Entire mortgage lending sectors were completely eliminated

Subprime mortgage lending was one of the largest mortgage lending sectors in the mortgage banking industry.

The Demise Of Subprime Lending

All subprime lenders like Countrywide and Washington Mutual literally went bankruptcy overnight:

  • With the shutdown of these giant corporations, were losses of millions of jobs
  • Mortgage professionals in these industries were jobless
  • To top it off, the whole mortgage industry went through a major overhaul where all mortgage loan originators needed to get licensed and go through intensive federal and state background investigations and take the NMLS Examination
  • The NMLS was created and implemented
  • Its purpose was to be a central informational center where it is a consolidation of all states and its regulators and its function was to centralize the licensing and information system of all mortgage companies as well as all mortgage loan originators
  • All mortgage loan originators had to take NMLS certified 20-hour pre-licensing course
  • They needed at least 75% of the questions correct on the NMLS examination
  • All mortgage loan originators also needed to apply for each individual states that they wanted to get licensed in and pass the state exams as well as go through the state’s licensing requirements
  • Each state has its own licensing requirements which include its own separate credit requirements

Some states are much more strict when it comes to bad credit than others.

Can You Become A Loan Officer With Bad Credit And Case Scenario Of My Own Experience

Can You Become A Loan Officer With Bad Credit And Case Scenario Of My Own Experience

I used to own and manage 7 apartment complexes, just under 3,000 residential units:

  • Due to the 2008 Real Estate And Mortgage Meltdown, lost all of my properties and went through a financial meltdown back in 2010
  • Had to restart my life over again
  • I was in my mid 40’s at that time
  • Getting an entry-level job in a different field was out of the question
  • Due to my extensive real estate investment experience and my knowledge in both commercial and residential lending, I decided that a career as a mortgage loan officer would be ideal
  • I found out at the time that part of the licensing process was going through a credit background check
  • My credit was always perfect until 2010
  • It plummeted to the low 500’s

I had over 55 derogatory credit items.

Every State Has Its Own Rules With Derogatory Credit Tradelines

My derogatory credit included outstanding unpaid collection accounts, multiple judgments, charge off accounts, and multiple foreclosures as well as other derogatory credit items:

  • I contacted the regulators for the state of Illinois and the state of Florida
  • The two states I wanted to get licensed in but the regulators told me that they cannot give me an answer whether or not that they will approve me with the credit I had at the time
  • I told them that I did not want to waste my time and money in preparing for the NMLS test and go through the licensing process to find out later that I did not qualify for my poor credit
  • The answers that I got was that I needed to go through the process

I was told after I have submitted my application along with the proper fees, that they will then give me an answer.

The Key To Passing The 125 Question NMLS Exam

  • Paying the fee was not the issue here
  • The NMLS exam was a very tough exam and was extremely time-consuming
  • This was a very difficult time of my life where I had no source of income and to take a month or two off to study and prepare for the NMLS exam was a major commitment
  • To go through the 20-hour pre-licensing course to later find out that I do not qualify to get a mortgage loan originator’s license would be more than devastating and two months wasted
  • I must have contacted both the state of Florida and state of Illinois examiners dozens of times hoping to get someone there to give me a straight answer
  • If someone there would have told me NO that I do not qualify due to my poor credit and outstanding collection accounts and judgments, that would have made me happy so I can pursue other career opportunities

But they did not give me a NO nor a YES or even a MAYBE.

Taking A Gamble Without An Answer

This was January 2012 and I decided to just take the gamble and take the 20-hour pre-licensing NMLS Course with Real Estate Institute in Niles, Illinois. It was a three full-day course.

  • The instructor who taught the course was a gentleman by the name of Peter Citera
  • Peter Citera was an extremely knowledgeable instructor at the Real Estate Institute in Niles, Illinois but also a practicing licensed mortgage loan originator
  • As soon as I met him, my first question to him was ” Can You Become A Loan Officer With Bad Credit?”
  • Peter Citera, like mortgage regulators did not have a definitive answer to my question
  • You see, I did not just have bad credit, I had really bad credit
  • My background was that I owned, operated, and managed 7 apartment complexes which consisted of just under 3,000 units and had over 150 employees
  • I will explain on a separate blog on how I lost $100 million of my net worth in less than a year due to the lies and unscrupulous practices of Citibank (It will be an interesting story on how commercial banks are not regulated and borderline criminal)
  • My credit report was dozens of pages of bad credit
  • Consisted of outstanding unpaid collection accounts, judgments, charge offs, late payments, and any other derogatory credit that you can think of
  • I was still ready to call it quits and not pursue my NMLS license if someone told me that I will not get a mortgage loan originator’s license due to my bad credit

This was because I did not want to go through the stress of studying and preparing for my NMLS Test and go through the licensing process to get told that I do not qualify for my mortgage license due to my very poor credit.

Uncertainty Of Getting My NMLS License Approved

Here I was, studying for the national NMLS exam for the next four weeks, investing more than 10 hours per day, 7 days a week with the uncertainty of not knowing whether I will ever get my license.

  • I Googled search every day on the internet looking for answers on whether you can become a loan officer with bad credit and got conflicting answers
  • I must have contacted over three dozen states
  • I talked to their mortgage licensing division and got the same answer that they could not give me the answer to my question

The only thing that I can do is just pass the NMLS exam and apply for my mortgage loan originator’s license and that is the only way that I can find out.

Applying For My Mortgage Loan Originator’s Licenses

Applying For My Mortgage Loan Originator's Licenses

It was now February 2012 and after going over 1,000 practice exam questions and spending hundreds of hours of studying for the NMLS exam, I was ready to take the national NMLS Test.

  • The test was a three-hour examination given at a test center
  • I was done with the exam in less than 90 minutes
  • I passed the national NMLS Test with a score of 84%
  • I was happy but still the thought of me not being able to get my mortgage license still was stressing me out
  • The next step was for me to take the Illinois State NMLS Exam which I studied for it and passed it the following week
  • Now I was ready to apply for my Illinois mortgage loan originator’s license
  • I applied for my Illinois mortgage loan originator’s license through the NMLS and paid the proper fees
  • Within two weeks, I got the great news that Illinois has approved my mortgage loan originator’s license and I was ready for business

I could not be happier and it was one of the happiest moments of my life when I got my Illinois mortgage loan originator’s license and the many weeks of stress and worrying finally came to an end.

Applying To Various States

The next state I applied for was the state of Florida.

  • Florida, again, approved my Florida mortgage loan originator’s license with bad credit
  • My credit scores at that time I applied for my Illinois and Florida state licenses were under 500 FICO
  • Both state regulators wanted to see a letter of explanation with regards to my poor credit, open outstanding unpaid collection accounts, judgments, and other derogatory credit information
  • I have also not filed my personal and corporate income taxes since 2008 because of financial constraints
  • My accountant wanted over $100,000 for him to do my corporate and personal tax returns due to having to file 7 corporate returns due to the 7 Limited Liability Corporations I had to do and the complexity of it
  • The IRS eventually helped me complete all of my returns (I will write about how the IRS and special agent John Hedin, who turned out to be a great friend of mine, helped me with being compliant with my corporate and individual taxes and do my tax returns on a later blog)

So, Can You Become A Loan Officer With Bad Credit? The answer is YES and NO. Here I was now very confident that I can now become a mortgage loan originator in any state with bad credit, however, that is not a case.

States Where You Can Get Denied For MLO License Due To Bad Credit

I live in Kenosha County, Wisconsin which is the border of Wisconsin and Illinois and my branch office is in Illinois, which is about an hour from where I live.

  • Since I live in Wisconsin, I applied for my Wisconsin mortgage loan originator’s license in April 2013
  • I figured it would be no big deal in getting my Wisconsin mortgage loan originator’s license approved
  • I just assumed it would be a cakewalk because I had no issues with the state of Illinois and state of Florida

Unfortunately, two weeks after I have submitted my Wisconsin mortgage loan originator’s license application, I get an email by a Wisconsin mortgage regulations investigator telling me that I cannot qualify for a Wisconsin mortgage loan originator’s license.

Can You Become A Loan Officer With Bad Credit And Outstanding Judgments

The reason I do not qualify is because I have multiple outstanding judgments which are recorded on Kenosha County public records:

  • I told her that the judgments were due to my commercial properties being foreclosed on any my $14 million dollar mansion that was foreclosed on in Barrington Hills, Illinois
  • Also that the lenders who were the judgment creditors were leaving me alone
  • The mortgage licensing investigator told me that the unsatisfied judgment needs to have a written payment agreement
  • That it cannot be ignored if I wanted my Wisconsin NMLS license
  • I told her then that I will enter into a $50 to $100 per month payment agreement and will that be okay
  • She told me NO
  • One of the judgments was $6,000,000
  • I needed to enter into a written payment agreement with the judgment creditor for at least 5% of the unpaid judgment amount or a payment plan for $30,000 per month
  • I told her that I could not do that
  • How can I come up with $30,000 per month
  • I spoke with the supervisor and it was like talking to a brick wall
  • Long story short, the state of Wisconsin was going to deny my Wisconsin mortgage loan originator’s license due to my prior judgments and prior bad credit
  • I ended up withdrawing my Wisconsin mortgage loan originator’s license

Can You Become A Loan Officer With Bad Credit: Depends On The State

Can You Become A Loan Officer With Bad Credit And Get Licensed

The good news is that I now am licensed in the states of California, Ohio, Alabama, New Jersey, Virginia, Illinois, Florida, and Kansas. Can You Become A Loan Officer With Bad Credit? Yes, you can become a loan officer with bad credit depending on the state you apply. If you have any questions in getting your mortgage loan originator’s licenses with bad credit or are interested in joining my team as a mortgage loan officer, please contact via email at [email protected] I am available 7 days a week, evenings, weekends, and holidays to take your phone calls and answer all of your questions.

 

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297 Comments
  1. pat Lewis says

    This helped me. I’m applying for a job as a loan officer and I’m concerned about my credit. I feel a little my confident about getting my license

    1. Gustan says

      No worries. You will do fine. Don’t let anything get in your way to the road of success. I respect your ambition and don’t let nothing get in your way. 😉

      Gustan Cho

    2. JoeC says

      Good evening. First I would like to say thank you so much for taking the time to create the blog with all that very helpful information.

      I am a licensed loan originator in the state of Florida for many years. I recently had to have some medical procedures done that my insurance wouldn’t cover. Most notably roughly $15,000 worth of sleep apnea surgeries.

      I have very severe sleep apnea and it causes me to be exhausted every day. It’s made life every day very difficult. The surgeries were an absolute necessity to try to restore some decent quality life.

      There was one other medical procedure I had done recently as well. I have a bill of about $8500 on that.

      And finally I also have about $4000 in an old bill from an old emergency room visit.

      All this totals about $27k in medical related credit loans and medical bills that I have at this time.

      My credit is decent (655 mid FICO) and there’s no derogatory items or late payments or any collection or charge offs.

      If these three accounts were to go to collection would this disqualify me from being able to renew my LO license in Florida?

      I sincerely look forward to your response. Thank you so much in advance.

      1. Gustan Cho, NMLS 873293 says

        In most states, medical collections do not matter. You should be fine with outstanding medical collections as long as you can provide a good letter of explanation. Feel fee to contact us if you have any other questions. The very best to you.

  2. Gustan Cho says

    No worries. It depends on each individual state on getting a loan officer license

  3. Gustan Cho says

    California is one state that doesn’t even look at a NMLS Mortgage Loan Originator applicant’s credit scores or credit report.

  4. Gustan Cho says

    I have a loan officer who applied for a Texas MORTGAGE LOAN ORIGINATOR License with a second mortgage charge off that was six years old. She had perfect credit besides the charge off. Texas was about to deny her MLO LICENSE so she withdrew her MLO LICENSE application. She went through credit repair and got her charge off removed from her credit report. She reapplied for her TEXAS MLO LICENSE and she got it approved.

  5. Gloria Lewis says

    The state of Texas looks at everything, and they check and double check so that they do not miss anything so if you are trying to get your loan officer license with bad credit, please consider getting your credit in order before starting the process of getting your license please.

  6. Justin says

    Hi!

    I’m glad i came across this. My name is Justin, I’m a 24 year old male located in California. I recently had my interview with a mortgage Company in Sacramento CA, I’m worried that my credit will hold me back from becoming a loan officer.. My credit it is in the mid 500’s around 550-560. I have no late payments on my record at all.. The only open accounts I have in collection are all medical.. Which was due to them switching everything in my name as soon as I turned 18.

    I really want a career in this industry. Do you think that will hold me back at all in my state ?

    Thank you for taking your time to answer my concern.

    1. admin says

      California does not even look at credit scores so I would not worry about it. Texas, Connecticut, Oregon are one of the toughest states for credit issues

      1. Gustan Cho, NMLS 873293 says

        California does not even look at credit scores so I would not worry about it. Texas, Connecticut, Oregon are one of the toughest states for credit issues. If you have any question, please feel to reach out to me.

        Gustan Cho NMLS 873293
        Area Manager
        The Gustan Cho Team

        1. T says

          Hi Gustan, I do have 4 collections right now and credit score is 619 and I am applying for my Oregon, Texas licenses. Will I have issues in doing so?

          1. Gustan Cho, NMLS 873293 says

            You will definitely have issues in Texas. Texas will require you either to pay the collections in full and/or enter into a written payment agreement. Other states such as California, Illinois, Ohio, Alabama, New Jersey and many others will not matter.

    2. Gustan Cho, NMLS 873293 says

      Justin,

      My name is Gustan Cho NMLS 873293 and I am the Area Manager for The Gustan Cho Team. You have nothing to worry about in getting your California NMLS SAFE license in the state of California. California does not even look at credit scores nor credit reports so you can rest assured that it will not effect you getting you license. There are states that do care about bad credit such as Texas, Wisconsin, Oregon, and Connetticut. Please feel free to call me or text me at http://www.gustancho.com or email me at [email protected].

      Gustan Cho NMLS 873293
      The Gustan Cho Team

      1. shannon garrett says

        California doesn’t require credit checks. Wonder why they ask for a fee.

        1. Gustan Cho, NMLS 873293 says

          California does require credit checks. All state regulators are required to run a credit check on all MLO applicants. Therefore, you will be charged a fee.

          1. Shannon Garrett says

            Interesting, so when you put down that you have a tax lien they won’t look at it.

            1. Gustan Cho, NMLS 873293 says

              I do not understand your question? Who will not look at the tax lien?

  7. Maria says

    I have a question, what about NEW Jersey? That’s my goal of becoming a license loan officer, but my credit score I’d below 620 and have late charges and two collection. Thanks, Maria

    1. Gustan Cho, NMLS 873293 says

      Maria,

      There are certain states that really care about a loan officer credit scores such as Connetticcutt, Texas, Wisconsin, and Oregon. However, New Jersey does not care about credit scores. Other states that are lenient are Illinois, Florida, Ohio, Alabama, Indiana, Virginia, Alabama, and many others. California does not even look at the credit reports. Please feel free to contact me on the number below if you have any other questions or if you are interested in a career with The Gustan Cho Team NMLS 13589

      Gustan Cho NMLS 873293
      Area Manager

      1. Jon in Florida says

        Gustan,

        Thank you for writing this blog. I gives many confidence to chase their goals. I’m in Florida and I’m worried about my credit scores which are 612 – 622 Derogatory’s stem from a car accident which damaged 3 levels of my cervical spine & my lower back! I had one surgery which I had a bad recovery that put me out of work for over a year. Unexpected life happens no matter how much you plan. No way to pay debts and no income to live mounted more debt. I hope Florida would be worth while to study for based on your info. I would even like to work for you if you need processor/ originators from Florida remote.

        1. Gustan Cho, NMLS 873293 says

          All states have tightened up on derogatory credit. Credit scores do not count. Medical collections is understandable. However, you may have to enter into a written payment agreement with your creditors and/or file bankruptcy

    2. Gustan Cho NMLS 873293 says

      New Jersey is like California. They don’t even look at credit scores or credit.. Connecticut is a different story. As long as your DLA was at least 6 or more months, you will have no issues.

      Gustan Cho NMLS 873293
      Gustan Cho Associates
      The Gustan Cho Team

  8. Haylee says

    What about Minnesota? How does Minnesota view bad credit?

    1. Gustan Cho, NMLS 873293 says

      Bad credit is a very general broad term. If you had a prior bankruptcy, foreclosure, deed in lieu of foreclosure, short sale, that is alright. Regulators look at the candidates overall credit report and payment history. If you can be more specific, I may be able to answer your question.

      Gustan Cho NMLS 873293
      Area Manager
      The Gustan Cho Team

    2. Gustan Cho NMLS 873293 says

      I really do not know about Minnesota. One thing you need to realize is that bankruptcy and foreclosure or short sales don’t matter. Some states like Wisconsin, Connecticut, Texas, and Oregon cares about charge offs and collections where they want to see a payment plan. Connecticut requires one year after Chapter 7 Bankruptcy and Oregon has 5 years after bankruptcy discharged date. This requirement is illegal but they still do it
      Once Obama is out of office, I think this will change.

      Gustan Cho NMLS 873293
      The Gustan Cho Team
      Gustan Cho Associates

  9. Haylee says

    Thanks for the quick response. To be more specific with bad credit. It is collection and judgement and charge off for revolving debt due to joining debt consolidation program.

    1. Gustan Cho NMLS 873293 says

      As long as you have been timely in the past 12 months, most states don’t care about past bad credit. They don’t look at credit scores. They just look at past 12 months payment history. I hot Florida and Illinois approved with a 480 credit score. Don’t worry about it. Save your worries on other things that matter
      Call or email me if you need more clarification.

      Gustan Cho NMLS 873293
      AREA MANAGER

      1. Hopefully in Ca. says

        I have been out of the industry for awhile, but I now would like to resume my career as a L.O. , however I was licensed in six states (New York, Michigan, Utah, Texas, North Carolina & New Mexico) and I am considering filing for bankruptcy. Will I be able to renew my previous licenses? My current FICO score is approx. 532. Bad I know…due to a medical condition that left me unable to work and collecting disability…hence my financial state.

        1. Gustan Cho, NMLS 873293 says

          Bankruptcy will enable you to apply for licenses in all states. Credit scores do not matter.

  10. Shelly says

    I have been asked for an interview from a mortgage company in Missouri. My credit is poor I filed bankruptcy 2 years ago did a deed-in-lieu back in 2009 everything went bad due to Medical reasons. Health is better but stuck with all the bills which are on my credit report. How does Missouri handle poor credit for being a loan originator. Thank you

    1. Gustan Cho NMLS 873293 says

      You have absolutely nothing to worry about . Missouri don’t care about bankruptcy nor medical collections. You are all set. The very best on your career.

      Very Best

      Gustan Cho NMLS 873293
      The Gustan Cho Team
      Email [email protected]
      Toll Free Direct 800 900 8569
      Cell 262 716 8151

    2. CHRISTIE says

      Hello, I would like to get my mortgage originator license in Colorado but am worried because I had to file a chapter 13 bankruptcy about 6 months ago. Are you familiar with the criteria of COLORADO in regards to credit scores and bankruptcies? I don’t want to spend all my time going through the courses and taking the test if I’m going to get denied because of my bankruptcy. Thank you in advance!

      1. Gustan Cho, NMLS 873293 says

        You are fine and will not have any issues with any states as long as you filed Chapter 7 and/or Chapter 13 Bankruptcy. Just be timely on all of your payments to the Trustee and you will have no problems. Bankruptcies is a federal law that allow consumers start a fresh financial start in life. The best to you. Feel free to contact us with any further questions.

        1. MARIE A PISASIK says

          I was a mortgage Broker Business for over 9 years till the crash. I was scared to restart.I fell back on my second career as a medical Assistant till the hurricane Irma. I fell behind in my mortgage payments because I was told the payments would be put on the rear of the mortgage. This was false information, all was due at once. I did a Chapter 13 for 12 months, never miss a payment. Reestablished my credit. 2 new credit cards. Mortgage is current. Do you think with 12 on time payments that Im safe to apply here in Florida and tennessee ?

          1. Gustan Cho, NMLS 873293 says

            You will not have any problems. You will be fine.

  11. Emily says

    I was told by an employer after a review of my credit that I could not get a mortgage loan originator license unless I entered payment plans with all creditors in Michigan. It has been six years since the medical problems I had resulted in an 8 month hospital stay and loss of job, apartment, credit cards, plus medical bills. I told them that on the phone. Some of the negative accounts have begun falling off and I do not want to enter into payment arrangements as that would restart the clock. My credit score is 638 right now. I currently hold a MI Salesperson license as a Realtor and had no idea that the requirements to be a loan officer were based off credit.

    1. Gustan Cho, NMLS 873293 says

      Your employer is full of it. Please contact me at [email protected] or call me anytime on my cell phone at 262-716-8151. I will help you and you can even work for me.

      Gustan Cho NMLS 873293
      Area Manager
      The Gustan Cho Team

  12. Tosha says

    I’m in DC and the company that wanted to hire me withdrew their offer because I recently had a discharged BK7. DC’s licensing website wasn’t very clear in terms of creditworthiness or financial responsibility requirements. Is there a certain amount of time I need to wait after BK before applying for licensing or will a letter of explanation suffice.

    Thanks

    1. Gustan Cho, NMLS 873293 says

      Tosha,

      There are no rules that a company not hire you because a Chapter 7 Bankruptcy discharge. We are a national FANNIE/FREDDIE Direct mortgage lender licensed in 50 states and we do not have such policy. Same goes with licensing. Most states like that you have filed bankruptcy because you are now debt free and have no liabilities. There are certain states like Connecticutt that has a one year mandatory waiting period after a Chapter 7 Bankruptcy discharged date and Oregon where it has a five year waiting period after a Chapter7 Bankruptcy. If you are looking for a remote loan officer position with a great national mortgage company with chances of advancement, please contact me at [email protected]

      Gustan Cho NMLS 873293
      Area Manager
      Website http://www.gustancho.com
      Toll Free Direct 1-800-900-8569
      Cell 262-716-8151
      Direct 262-878-1965
      Available 7 days a week

      1. lindsay clark says

        Hi Gustan! Thanks for all the helpful info you have provided. I live in Louisiana and am interested in getting licensed. However, i split with my ex earlier this year and went through some financial trouble with also being laid off from my job. I am planning on filing a chapter 7 soon and would definitely be interested in hearing your thoughts about when is the best time. My credit has fallen below a 500 and i do have several collections and charge offs right now. I would also
        like to hear more about remote loan officer positions that you may have available.

        1. Gustan Cho, NMLS 873293 says

          Credit scores do not matter with regulators. Bankruptcy is good. A bankruptcy is a federal law that enables consumers to get a fresh financial start. You will have no problems with getting licensing with a recent bankruptcy. Connecticutt requires a one year waiting period after a bankruptcy. Oregon has a five year waiting period. All other states have no waiting period requirements. You should be fine and have no issues if you file bankruptcy with getting licensed.

  13. Dayna says

    Hi. I am taking applying for my license and I live in New Jersey. My credit score is low 500’s. I have a few late payments, but mainly my credit is poor from being late student loans and have my credit cards maxed out. I have about 7 cards maxed out. Will I be okay?

    1. Gustan Cho, NMLS 873293 says

      New Jersey does not matter with credit

  14. Si,vana Lallo says

    Hello Gustan Cho, my name is Silvana and I am thinking of taking my NMLS in Colorado but am worried about my bad credit.Is Colorado one of the States that care about credit score?

    1. Gustan Cho, NMLS 873293 says

      Credit Scores does not matter. You can have late payments in the past year and as long as you are current then you are alright. California, New Jersey, Alabama, Arizona, Kansas, Washington normally does not care about collections and/or charged offs. Worst case scenario, if a regulator gives you a hard time, you can enter into a payment agreement with the creditor and that will resolve it.

    2. Gustan Cho, NMLS 873293 says

      You should be fine

  15. George E says

    Thank you for the article. I will be retiring from my current job soon. I am seriously taking steps towards becoming a MLO in California. Before retiring I am getting my FICO scores from good to better. Thanks for the info.

  16. Sasha says

    Hi! I’m currently in my 20 hours education process for obtaining a MLO in the state of Colorado. I see that bad credit isn’t an issue and past bankruptcies are ok with 12 months of good payment history. I recently filed for bankruptcy in July of 2017 which was final November 6th 2017 so I do nothethavea year(12months) of good payment history to go off of…will this be a problem and should I wait to apply/take my test till my 12 months after my finalization of my bankruptcy?

    1. Gustan Cho, NMLS 873293 says

      As long as you filed Chapter 7 Bankruptcy and it has been discharged, you don’t need 12 months of timely payments. You should be solid. The very BEST to you and your endeavors.

      Gustan Cho NMLS 873293
      Branch Manager of USA MORTGAGE
      The Gustan Cho Team at USA MORTGAGE

  17. Martha Rodriguez says

    I just started with them and I love these people!! They have been very responsive and respectful!! My credit score had went up seventy points in less than a week!!! Awesome!!! Also had student loans that are saying paid in full 100%!! 16,000$ ! Thank you!!’ Thank you God and MASTERCREDIT!!’
    ( MASTERCREDITFIX at GMAIL dot COM )

  18. Jennifer Brown says

    I am currently a Loan officer, I am licensed in MN. I am looking into filing bankruptcy, however do not want to lose my license. Do you know will they revoke a license if I do file? Does it matter if it is a chapter 7 or 13?

    1. Gustan Cho, NMLS 873293 says

      Good afternoon Jennifer

      Actually filing Bankruptcy is good when it comes to licensing. The only two states there are issues with if you were to get licensing is Oregon and Connetticut. However, renewing licenses is no issue. You need to let NMLS know and upload your discharged papers. Chapter 7 and/or Chapter 13 does not matter. Bankruptcy is a federal law that gives consumers a legal way of restructuring their debts and/or getting their debts discharged. You are set to go and I would not worry.

  19. Staci F. says

    Hi, I actually had my license previously and let it expire when I went to the operations side for 6 years thinking I would never go back. However, I have decided I do want to go back and have to retake test and apply, etc. I am in Texas and know they are tougher than other states but have heard they aren’t as tough as before. Can anyone help with this? I have some collections in the last year and a judgement from 2006 that I could get in a payment plan on. I just can pay the judgment in full. Any help would be greatly appreciated!

    1. Gustan Cho, NMLS 873293 says

      You are correct. Texas is one of the toughest states when it comes to derogatory credit. As long as you have a written payment plan established with the creditor you should be fine. If you are interested in a career opportunity as a remote loan officer with us, please contact Michael Gracz at [email protected].

  20. Renee says

    I have my MLO for Washington and will be renewing in November. I just got my license, but have been an MLO at a CU where I didn’t need my state license. Anyway, between custody court with my ex and my new husband losing his job for 15 months (reducing our income by $48k/year!) I now have an auto lease repo I’m dealing with. Will WA strip me of my license because of this?

    1. Gustan Cho, NMLS 873293 says

      Once you are licensed it is fine. Plus Washington is not too strict with credit.

      1. Marie says

        Gustan, I have to say I love this thread and it gave me the push I needed to get into mtg. I passed my safe test (93%) but filed BK in May which was discharged in July 19’. I really want to be licensed in TX but am worried about them denying my license. I’ve already got my credit score up to a 660 but am still very nervous. Any advice would help so much!! Thank you!

        1. Gustan Cho, NMLS 873293 says

          You will be fine in getting your NMLS state licenses in any state with the exception of Connecticut and Oregon. Connecticutt used to have a one year waiting period after a discharge. Oregon has a five year waiting period. Congratulations. You are all state in getting your state licenses in any state so no need to worry. The very best to you and your family.

      2. Mark says

        I have a bk from 10 yrs ago but after getting laid off three years ago I ended up with multiple collection accounts, foreclosure process started (but redeemed before judgement or court date) and some slow/late pays. No judgments or tax liens. How difficult would it be to get licensed in Washington in 2020?

        1. Gustan Cho, NMLS 873293 says

          No problem. Nothing to worry about. You will not have a problem getting your NMLS license. The best of luck to you.

  21. mgpdua says

    Hello I have my NMLS with a major company and applying for another and after credit background check, the investigator requested a letter of explanation regarding my Ch 7 BK discharged 3/17. Since then I have made on time payments with one auto loan , one unsecured credit card card, and One retail card. Could they deny me employment ? New company is offering my DREAM JOB !

    1. Gustan Cho, NMLS 873293 says

      Bankruptcy is a federal law that has been created to help consumers in debt get a fresh start with their financial life. A company cannot discriminate and not offer you a job due to your bankruptcy. Only federal law enforcement agencies such as the FBI, CIA, can make exceptions. You should be fine. Maybe the company wanted the circumstances that led to your bankruptcy. Good excuse will be loss of job, divorce, medical, loss of business, and/or health issues.

      1. mgpdua says

        Thank you Gustan! Another question for you. Is it a conflict of interest for a mortgage broker or loan officer to work deals for a spouse or relative ?

        1. Gustan Cho, NMLS 873293 says

          As a loan officer, you cannot do your own loans. You can do loans for relatives but not your own.

  22. Christina says

    Hi Gustan Cho, I have recently applied for my MLO license in IL, MI, MO and Virginia. My credit score is not poor, however I have several collections about 35k that was charged off back in 2016. I have not re-established my credit at this point so the only credit on my report is negative. What do you feel the likelihood is that I will be approved by at least 1 of the 4 states? I need to be licensed to continue working where I am at and to start paying on the Debt Management Plan that I recently set up to work towards financial wellness. Thanks for your help!

    1. Gustan Cho, NMLS 873293 says

      I dont think you should have any issues with the above states. Credit scores does not matter. Some states like Indiana, California, New Jersey, Arizona do not event look at bad credit. Other states like Texas, Wisconsin, Conneticutt, Massachusetts, Georgia are very anal about it. I had really bad credit when I applied for my licenses. Virginia, Florida, Illinois, Ohio, Alabama, Kansas, California, New Jersey has not given me a hard time. If any states give you a hard time, you may consider filing bankruptcy and/or setting up a written payment plans. Best of luck to you. Email me at [email protected] if you have any questions.

      1. Christina says

        Thank you so much for your advice and support!

        1. Gustan Cho, NMLS 873293 says

          The very best to you. Do not hesitate to contact me if you have any other questions or are seeking an employer. Always looking for great talent.Have a great day.

  23. Azahel Almerida says

    Im in Fl. I filled banckrupsy on 2013. can I get a license

    1. Gustan Cho, NMLS 873293 says

      Of course. Bankruptcies are good and does not affect you from getting a NMLS MLO License in 48 states. Only two states have issues. Connecticutt has a one year waiting period and Oregon has five years. Both CT and OR requiring waiting period is illegal. Best of luck to you and post any questions you may have.

  24. Desmond says

    Hello Gustan Cho I am currently trying to apply for an MLO license in FL. My credit is around mid 500’s but I currently owe in child support and some backed taxes.

    I used to work for countrywide back when licensing wasn’t required. I would really like to get back in this carrier field since this was something I really enjoyed doing.

    Thank you for your input.

    1. Gustan Cho, NMLS 873293 says

      Credit scores does not matter. I would get your child support and back taxes on a payment plan and you should be fine.

  25. Kelly Stephens says

    Does anyone know if Nevada is strict?

    1. Gustan Cho, NMLS 873293 says

      What type of bad credit do you have that you are concerned about. Many loan officer candidates worry about low credit scores. Regulators do not care about credit scores. It is totally fine for you to have late payments in past 12 months and you are caught up. It is also fine to have outstanding tax liens and judgments and be on a payment plan. Bankruptcies do not affect anyone getting a licensed. Actually bankruptcies are good because its a federal law that gives consumers a fresh start. Please be more specific where I can hopefully guide you the right way. Certain states like Texas, Georgia, Massachusetts, Wisconsin are crazy and want you to pay outstanding collections and/or charged off accounts even though its years back. Most states are reasonable. California does even look at credit and is extremely lenient.

  26. Tim says

    Hi i have been a loan officer for 20yrs working in banks and mortgage companies i move to Tx from Mn about 3yrs ago and can not find a descent mortgage company or bank that will take a chance on higher me i have pass credit problems no bankruptcies or liens i am considering moving back to Mn so but i am not sure how there creidt critier is since they just came on as national test i have passed the test and ave licence in Al/Mo but no bank in Texas will higher me any advise.

    1. Gustan Cho, NMLS 873293 says

      I have remote loan officer positions available. Please email me your contact information at [email protected]. Do you have a book of business? How do you get your leads? We are direct lenders licensed in multiple states and specialize in government and conventional loans with no overlays. We also broker loans on non-qm loans, bank statement loans, and other alternative financing loan programs.

    2. Kelly says

      a few late payments and a charge off account. I applied for the license in Nevada, and got a notice saying I have to submit documents for credit report clarification. Not sure what that means….

      1. Gustan Cho, NMLS 873293 says

        They need letter of explanation of derogatory items on your credit report.

      2. Bilal says

        Thank you so much I was just offered a position. I am waiting for their licensure team to contact me back and let me know

        1. Gustan Cho, NMLS 873293 says

          Congratulations.

  27. Tim says

    Sent to email.

    1. Gustan Cho, NMLS 873293 says

      Great. I will respond to your email.

  28. Jay says

    Hi Gustan Cho, do you know if NY is strict with the credit , bunch of lates, charge offs and collections.

    thanks

    1. Gustan Cho, NMLS 873293 says

      I do not know about New York but New Jersey is very easy with bad credit.

  29. Dan says

    Hello Mr.Cho,

    I’m thinking about going through the process to become a mortgage loan originator in Florida but I’m concerned about my credit. Last year during hurricane Irma I had loss of employment and stopped paying my credit cards, about 6 of them. I haven’t paid them since and went into collections on some. My credit dropped from the 700s to the mid 500s. Should I be concerned? I’m extremely motivated to acquire this license seeing that I have a lot of possible connections but wouldn’t want to go through the time money and effort to get denied.
    I look forward to your response. Thanks in advance

    1. Gustan Cho, NMLS 873293 says

      Dan

      Florida has gotten tougher with credit. Collections, charged off accounts that is non-medical may need to be either paid and/or entered into a written payment agreement. Another option is file for bankruptcy. Contact me if you have any questions. Using this forum is fine too.

  30. Joseph says

    Hey Mr. Cho,

    I’m very serious about pursuing getting my license as a Mortgage Broker in the state of Washington. Due to loss of employment in mid-2018, I missed a few car payments…also I have a maxed out credit card. My credit score is in the mid-500s now. I’m up to speed and back on track with making payments since the last 4 months. But how strict is Washington state nowadays? I just don’t want to dedicate all the time and energy into studying just to be denied due to a past hiccup.

    1. Gustan Cho, NMLS 873293 says

      From what you are telling me, you are going to be fine. Regulators do not care about credit scores nor late payments. Best of luck to you.

  31. Danny says

    I want to become a Mortgage Consultant in Pennsylvania and I have very bad credit. This is due to a past bankruptcy and more recently a repo and late payments/ collections due to being laid off. Is this state strict with the credit review process?

    1. Gustan Cho, NMLS 873293 says

      Bankruptcy is no problem. Bankruptcies is a federal law to benefit consumers for a fresh financial start. Late payments after bankruptcy and/or foreclosure can be viewed by lenders and/or regulators as a second offense and financial irresponsibility. However, not all states have strict derogatory credit rules. You will have problems in certain states. However, states like California, Indiana, New Jersey, Arizona are not as strict. What state are you planning on getting licensed? Worst case scenario you may need to enter into a written payment agreement with the creditor.

  32. Martina says

    I am trying to get a Mortgage Originator licence in Delaware. My credit is bad due to my credit card debt/collections etc. How strict is Delaware?

    1. Gustan Cho, NMLS 873293 says

      Every state has its own bad credit guidelines. NJ, California, Arizona, Indiana is very lenient on collections. I would ask the regulator if you were to set up a written agreement and small monthly payment plan, if that would suffice. Bankruptcy is always an option as well.

  33. Andrea says

    Hi, I have just submitted all my stuff thru the NMLS for the state of UT and CA. I’m worried that my licenses will get declined due to my credit, I’ve been behind on my car payment and 1 credit card due to my spouse missing work. How strict is Utah and CA

    1. Gustan Cho, NMLS 873293 says

      California is no problem. You can get licensed in California with outstanding collections, judgments, tax liens, charged offs, late payments. I am not too familiar with Utah. Most states do not look at late payments and/or credit scores. As long as you are paying on them, it is fine. They may ask you for a letter of explanation. As long as you are behind and are still making payments, you should be fine and have nothing to worry about. Please let me know on your progress so I can share it with our viewers at Gustan Cho Associates. If you are looking for a remote loan officer opportunity with a direct lender with no overlays, please contact us at [email protected]. The very best to you and your career. Talk to you soon.

      1. Andrea says

        I’m hoping it will all be approved, I did put a LOX with my application
        Both CA and Utah submitted fingers crossed

        1. Gustan Cho, NMLS 873293 says

          California you are set. Utah should be fine as well. Please keep in touch and let us know how it goes. Talk to you soon and the very best to you.

      2. Marco Hernandez says

        Hello Sir,
        The information on your blog is very interesting.

        Do you know something about Arizona rules on bad credit criteria / Bankrupcy? Can you please advise?

        Thanks,

        1. Gustan Cho, NMLS 873293 says

          What type of bad credit do you have? Judgments?

          1. Marco Hernandez says

            Thanks for your response?
            Collections, student loan default, repo; therefore, low score credit

            1. Gustan Cho, NMLS 873293 says

              Credit scores do not matter. Late payments do not matter. Collections, charged-off accounts, repossession may matter on certain states. State regulators may require you to enter into a written payment plan and/or file bankruptcy.

              1. Marco Hernandez says

                Ok, thanks a lot for your information.
                This gives me an idea what to do, and make a plan.
                I will continue following up your blog.

                1. Gustan Cho, NMLS 873293 says

                  Best of luck to you. Feel free to contact us if you have any other questions.

  34. Suzi says

    Applying for my MLO in California and Nevada, my credit score is low like 610 but i have ZERO late payments or anything negative for the past 8 years, 8 years ago i filed BK Chapter 7. Will this be an issue?

    1. Gustan Cho, NMLS 873293 says

      Regulators do not care about credit scores. Bankruptcies does not matter. It is a federal law that gives consumers relief. As long as you have no late payments and no negatives you will not have any issues. The best of luck to you.

  35. Samantha Martinez says

    Anyone know anything about Arizona?

    1. Gustan Cho, NMLS 873293 says

      Arizona is pretty lenient with getting a MLO NMLS License. Arizona is like California where they are pretty lenient with bad credit.

  36. Kristina says

    Anyone know about Oklahoma?

    1. Gustan Cho, NMLS 873293 says

      Yes. My associate George Makoutz is a direct lender with no overlays on government and conventional loans. Please email me your contact information and I will forward it to George. Thank you

  37. Ulysses says

    Gustan is the man! Answer to my prayers. When I get licensed can I work for you? What does your compensation plan look like ?

    1. Gustan Cho, NMLS 873293 says

      We offer remote loan officer positions nationwide. Are you experienced?

  38. Andrea says

    Hi There,

    Just want to let you know my Utah MLO licenses got approved I have VERY VERY bad credit and a theft misdemeanor from when I was 18
    Now just waiting on my CA licenses it been 20 days since submitted, how long does CA usually take?

    1. Gustan Cho, NMLS 873293 says

      Congratulations. California takes longer than any other states. It can take 2 to 3 months. Thanks for keeping us updated on Utah. Have a great day.

    2. Zack says

      Hi Andrea, how long did it take for them to approve your license in CA? I’m about 20 days in after submitting.

      1. Gustan Cho, NMLS 873293 says

        California takes longer than most states in getting approved for NMLS licenses for loan officer

  39. jolene says

    what about NY?? i have a 653 cr score.. i had late payments on my credit card a year ago but am all paid up and have no collections or anything else on my credit report.

    1. Gustan Cho, NMLS 873293 says

      You should be solid.

  40. Duke says

    I live in South Carolina, I have a judgement against me but credit score is 720. I have passed the test can I get a license?

    1. Gustan Cho, NMLS 873293 says

      I would apply for your license. If the regulator has an issue with the judgment, you may need to enter into a written payment agreement with the judgment creditor and/or file bankruptcy.

  41. Duke says

    I have a judgment but my credit score is great. I live in SC?

    1. Gustan Cho, NMLS 873293 says

      Judgments are the worst credit you can have. If the regulators say something, you may need to enter into a payment agreement. Or you may need to file bankruptcy;

  42. Louise says

    I am studying to take NMLS test in Texas. I have good credit 700 but had a foreclosure in 2015. I have been trying to find the guidelines for Texas in regard to foreclosure but have found nothing. Do you know about foreclosures?

    1. Gustan Cho, NMLS 873293 says

      You should be fine unless the lender is going after you for a shortage.

  43. Travis says

    Gustan, Thanks for the blog posts. I started studying for my Mortgage Loan Officer test, and when I read the credit requirements for my state of Ohio I almost quit. I found your blog post, and after reading it I decided to give it a shot. I passed my exam the first time and got my Ohio license. Thanks again!

    1. Gustan Cho, NMLS 873293 says

      Congratulations Travis. The very best to you and your career. You made a great career choice. You can help many families and earn a six figure plus income. Keep me posted on how you do. Thanks for you sharing your experience. Talk to you soon, my friend.

    2. bernie says

      Hi Travis,
      I have poorer credit and was wondering what your credit score was when you got your license?

      1. Gustan Cho, NMLS 873293 says

        Credit scores do not matter for regulators. It is timely payments.

  44. Jessica says

    Hi, do you have any experience with NC and SC? Credit score is terrible due to high balances and some late pays that have resulted from hardship. I’ve had 2 deaths in the family and been unemployed 6 mos- want to save myself the embarrassment of pursuing opportunities that require licensing if it’ll be denied.

    1. Gustan Cho, NMLS 873293 says

      Credit scores do not matter. Medical collections do not matter. Late payments are fine as long as you are making an attempt or just behind. Outstanding collections and charge off accounts are fine in most states. Some states are more strict than other. Bankruptcies and foreclosures do not matter. NC should be good. I dont know too much about SC

  45. Terri says

    Any experience with Louisiana Licensing and Personal Credit score?

    1. Gustan Cho, NMLS 873293 says

      Regulators are not concerned about credit scores.

  46. Luke says

    Hello Gustan,

    I am licensed in Florida and NC, and I would say that I have fair to slightly less than fair credit, though not due to foreclosure, late payments, bankruptcy, or judgements, but due to high balances on credit cards that I use to fund a separate business. Would this create issues in the other states that I am currently pending review? Those states are NY, NJ, and TX. Thank you!

    1. Gustan Cho, NMLS 873293 says

      Regulators do not care about credit scores. Your high credit balance will not matter. You will have no issues. The very best to you. You should get licensing in all 50 states with lower credit scores due to high balance. Contact us if you have any further questions. Have a great day.

  47. Jamie says

    what about the state of Michigan? Are they strict on credit issue?

    1. Gustan Cho, NMLS 873293 says

      What type of bad credit do you have? All state regulators do not care about credit scores. Michigan is pretty lenient. What type of bad credit do you have?

  48. Jamie says

    The bad credit I meant are collections.

    1. Gustan Cho, NMLS 873293 says

      Good morning. Sorry for the delayed response. I have loan officers in our company who got licensed in Michigan and other states with outstanding collections and charged off accounts. However, states like Florida used to be fine with collections but are now asking for it to either be paid, have a payment plan, or have a bankruptcy. Many states are getting tougher with collections where they were lenient in the past. Midical collections are normally exempt. However, if worse comes to worse, you may have to enter into a payment agreement. I think it should be fine but do not want to mislead you if they changed their policy or you end up with an examiner who is a stickler. Please let us know what the outcome is so I can advise future viewers. The very best luck to you.

  49. Wayne says

    Do you have to have good credit for the state of Maryland, I have a few accounts that are in collections but i am in payment agreements with some accounts. I have 6 licenses CA, TN, FL, WA, OH, and PA, but I have been denied by IL, GA, NC, and VA

    1. Gustan Cho, NMLS 873293 says

      As long as you have written payment agreements with outstanding collection accounts, you should be fine.

  50. Earline Morales says

    I live in Texas is there a specific credit score you need to be decline on getting your license?

    1. Gustan Cho, NMLS 873293 says

      There is no credit score requirements. Your credit scores do not matter when apply for NMLS state licensing

  51. Daniel says

    I am considering getting my license in Florida, I have a few accounts which are now in collections including medical bills and money that I owe to my University. Is there still a chance? My score is almost 600.

    1. Gustan Cho, NMLS 873293 says

      Credit scores do not matter. Florida is getting tougher with credit. Medical collections are normally exempt. With other collections, you may need to have to enter into a written payment agreement with the creditor and/or file bankruptcy. It will be up to the examiner you get on how anal they want to be. Some are absolute assholes while others will give you a pass with a good letter of explanation.

  52. Brandan says

    I recently worked for a licensed mortgage banker in sales as a telemarketer. My job was to generate leads for out licensed loan originators. I worked there for a year before I decided to apply for a loan originator position. My boss said they put you through the classes. I applied, got denied, and have no idea why. I have a credit score of about 560, no felonies (just misdemeanors), Bachelor’s degree in Political Science, proof I was accepted to law school (so if I can do good enough on the LSAT to get into law school, I figure I can pass the NMLS) and I worked for them for a year. What else could I be missing to get a loan officer position? Should I get licensed on my own and apply somewhere else?

    1. Gustan Cho, NMLS 873293 says

      You should have no problem getting your NMLS license. Once you get your license, contact me at [email protected] or text me at 262-716-8151. I can hire you and welcome you to our growing team. Just go ahead and get your 20 hours done and get your license. We offer remote loan officer positions and advancement opportunities. What state are you based in?

  53. Janine says

    Mr. Cho,

    I just read that you have to be sponsored before getting your license. I haven’t worked in a couple of years in any capacity. I was a commercial real estate investment analyst and back then you didn’t need a license. I’m in Georgia, and would like guidance on employment and licensing. Credit is a challenge, but I just finished my course and will try to take the exam in a couple of weeks. I would love to chat about the possibilities of all stated. Best-

    1. Gustan Cho, NMLS 873293 says

      Thank you for posting your comment. Georgia is one of the states you would need a sponsor during the licensing process. Most states let you get licensed without a sponsorship by an employer. Credit scores do not matter. However, if you have outstanding collections and/or charged off accounts, you may need to enter into a written payment agreement with the creditor. The very best to you.

  54. Jennifer A says

    Hi! I’m interested in getting my MLO…I am in Fl. I’ve been cleaning up my credit. I have only two derogatory items on there…1 car repo 4 years ago and 1 medical collection, $10 k student loans in good standing, all other lines of credit are on time. My credit has gone up…now 610. Would I gave a fair shot at getting my license.

    1. Gustan Cho, NMLS 873293 says

      Medical collections should not matter. The repossession may need to be paid either with a negotiated full payment and/or written payment agreement. You may get a pass on it with a good letter of explanation. It depends on the examiner you end up with. However, worse case scenario you may either have to get a written payment agreement or file bankruptcy and get it wiped off.

  55. Robert says

    I just passed my NMLS exam and will by applying for state licensing.

    I went through a divorce 4 years ago that left me with 3 repossessions, one paid in full and two that are charged off.

    What are my chances in the following states:

    Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee and Texas?

    Thanks!

    1. Gustan Cho, NMLS 873293 says

      Credit scores do not matter. However, more and more states are becoming stricter with outstanding collections and/or charged off account. Texas and Georgia will require you either to pay off the charge off accounts and/or enter into a repayment agreement or file bankruptcy. The other states depends on the examiner and can deny you the license unless you either have a written payment agreement and/or file bankruptcy. You should be fine with Alabama. Depending on the charged off accounts, I would consider making a written payment agreement and/or if they are large, filing for bankruptcy.

  56. Lani says

    Thanks for the pick me up your story was inspirational. Going for my license in Florida

    1. Gustan Cho, NMLS 873293 says

      Thank you for your comments. Wish you the very best. Please do not hesitate to reach out to us if you have any questions. Please update us on your career. Again, the very best.

  57. denise says

    Any idea how NY handles it?? My credit is below 600 had some issues with my mortgage and some medical collections

    1. Gustan Cho, NMLS 873293 says

      Medical collections are normally exempt for most states. Late payments and credit scores do not matter as long as you are caught up.

  58. tony says

    hey Gustan i am renewing in GA and FL

    i have had one 30 day late on a small CC in the past 12 months all are current now but the balances are near maxed. I also had a $500 collection from ATT cable bill come up. i think im ok but please confirm these wont be issues?

    1. Gustan Cho, NMLS 873293 says

      Credit scores does not matter so you will be fine.

  59. Austin says

    Does Florida, Georgia or NC considerVerizon collection or cable bill collections a item that they will make you pay off?

  60. IHeart1003 says

    Question about bankruptcy: I know you said in an earlier post that bankruptcy should not be an issue. Has that changed since last year? Also do I need to write an explanation letter if I do file for bankruptcy? I’m considering it but don’t want to do it if it will prevent me from renewing or getting additional states.

    Also, if one state denies me a license, does that affect my existing licenses? I have 4 licenses right now. Let’s say I apply in Texas and deny me, will that affect my current licenses or prevent me from renewing the following year?

    Not a lot of information about this online. Regulators seem to be very vague on their websites.

    1. Gustan Cho, NMLS 873293 says

      Bankruptcy is fine. You do need a letter of explanation but bankruptcy is a good thing. It is a federal law that helps consumers have a fresh start. The only two states you will have an issue is Connecticut and Oregon. Connecticut requires a one year wait period and Oregon a 5 year waiting period.

  61. Jay says

    I am currently training to become a loan officer and get my NMLS License. I filed a chapter 7 bankruptcy two years ago for a small amount and have since repaired my credit and have several lines of credit in good standing.

    Is this going to affect my ability to get my NMLS License in MASSACHUSETTS?

    1. Gustan Cho, NMLS 873293 says

      You are all set. Bankruptcies are good for those who are in debt. It is a federal law that enables consumers to get a fresh financial start. You will not have any issues with any states in getting your NMLS license. The very best to you and your new career.

  62. H good says

    Hello,

    I am in the process of accepting an offer of employment for a larger bank. The requirements for the position are NMLS licensing and Insurance 2-20. I filed chapter 7 in 2016 at the age of 21, due to some personal issues. I currently have a credit in the high 600’s low 700’s and have no collections. I started building credit the day of my discharge, was ironically approved for a credit card the same day. I recently bought a home, and have high credit limits with low usage. I do however have many inquiries from trying to establish credit. Should I be concerned with my licensing?

    I live in Florida.

  63. Ella says

    Hello , I was wondering if I should disclose my misdemeanor petty theft charge from 11 years ago that were expunged . I live in Florida and I’m applying for 24 states . In FL, it states you can say no to any charges but I’m still not sure if anyone else has had any issues . Any recommendations?

    1. Gustan Cho, NMLS 873293 says

      If the record is expunged then there is no reason to list it. Why create and open up a can of worms.

  64. grace says

    hello, i’m in the process applying a national MLO-DRE license through California. I have 2 late payment and collection history last year and a credit card balance 9k now. But my credit score still shows 730. Do you think this will affect my credit check background to pass?

    1. Gustan Cho, NMLS 873293 says

      You have nothing to worry about. Regulators do not care about credit scores or payment history nor credit card balances. Also, California is one of the most lenient states when it comes to credit.

  65. Kay says

    How hard is it in the state of Kentucky to get nmls for a bank position. Currently have a few credit cards that aren’t in great standing? Will this enable me from Getting the job ?

    1. Gustan Cho, NMLS 873293 says

      You do not need an NMLS license if your are working for a bank. You just need to be registered. NMLS has nothing to do with dealing with registered loan officers. You would need to contact the bank directly. They set their own standards.

  66. James says

    Hi Gustan!
    I am in Florida with 3 charge-offs and 3 collections reporting that are about 6 years old.
    Any suggestions on what states to apply?
    I was reading California DBO criteria, and they talk about credit being a factor of denial, so I am a bit concerned with applying there.
    Thank you for your help!

    1. Gustan Cho, NMLS 873293 says

      Florida has gotten much tougher when it comes to collections and/or charged off accounts. Credit scores and late payments do not matter. However, you may need to pay those charged off accounts or enter into a written payment agreement. Or you may want to consider bankruptcy.

      1. James says

        What do you think about California DBO?

        1. Gustan Cho, NMLS 873293 says

          You will not have any issues with California. California is the most lenient state when it comes to collections, charged-off accounts, judgments, tax liens, and bad credit. Texas and Georgia are the two toughest states when it comes to bad credit.

  67. James says

    Once I am licensed, I will reach out to you about joining your team. I am looking for a remote position.

    Happy holidays and thank you for the help!

    1. Gustan Cho, NMLS 873293 says

      Sounds like a plan. Go over as many multiple choice questions as you can. That is the key. Contact David Reinholtz at Loan Officer School. He has the best and easiest training program and the best study questions. His contact is http://www.loanofficerschool.com.

  68. Alana says

    Im looking to get my license in CT. I currently have 53k in various debts in 4 years. This was due to loss of job on my husband, medical debt post part which paused other debt payments for myself and son. I have items in collections I pay on time but the bare minimum. Im a SAHM and want to go back to work after 5 years and I am seeking you advice before I proceed

    1. Gustan Cho, NMLS 873293 says

      Credit scores does not matter for regulators. Connecticut is one of the tougher states when it comes to getting the state NMLS license. As long as you are on a written payment agreement with you creditors and are making payments on your outstanding collections, you should be fine. Or file for bankruptcy. Either option works.

  69. Jackson says

    This was great information. I’m about to start the process for my license. I’m in desperate need of a career change and I think this may be it. Hopefully it will be easy to get a job afterwards.

    1. Gustan Cho, NMLS 873293 says

      Best of luck to you.

  70. Corrine Lucas says

    Do you know how lenient Pennsylvania is? Thanks!

    1. Gustan Cho, NMLS 873293 says

      What type of bad credit do you have? Pennsylvania and New Jersey should be okay.

  71. Angela Blackmon says

    Hi
    I have a realtors licence in NC and currently looking to get Loan Officer License in NC as well. Have 2 judgments that are now paid credit score is 690. Will I encounter any issues for NC? Do you know that requirements for approval?

    1. Gustan Cho, NMLS 873293 says

      As long as your judgments are settled, it is fine. You will not have any issues with getting your North Carolina NMLS license.

  72. Natasha says

    I am looking into to becoming MLO and I am in NC. I do have some late payments on my credit will this stop me from getting my license when I am done and have passed the test in NC? Also, after the class in order to get a job will the late payments be an issue? Just need to make sure before I start all of this. Thank you in advance.

    1. Gustan Cho, NMLS 873293 says

      Late payments are no problem. Credit scores do not matter. You will not have any problems. The very best to you.

  73. Lee says

    Am I reading this correctly, you are now licensed in Virginia?

    1. Gustan Cho, NMLS 873293 says

      Our Virginia license is pending. However, I can refer you to my Associate George Makoutz who is licensed in Virginia and work closely with on states we are not licensed in. You can call and/or text me at 262-716-8151 or email me at [email protected]. I am always available.

  74. Charles says

    My wife and I went through some tough financial times back in late 2018/early 2019. 30 days late on Amex one time, then a worst payment status of 120 days on a Cap One Card. It sucked at that time. But since then, we have managed to pull ourselves out with the assistance of Piotr Bieda and Alex Carlucci service (on May 2019). I got many review on Youtube and every Credit report site and we decided to give him a try. I contact him via his email [email protected] told him every problem we have on our credit and asked if he could helped us out, he replied and assure us he would. He delivered what he promised after few days we contact him. Since then we’ve been able to qualify for a mortgage, every negative items or collection on the reports were cleared and finally our Credit score was in its 800s, I do feel like Tom service is incredible, but I’m glad I made the best decision of my life and the outcome was epic. Thanks Piotr Bieda, Alex Carlucci, and Massimo Ressa of Gustan Cho Associates

  75. Rodney Acoff says

    Hello Mr. Cho,
    Before the crash of 2008, I completed tons loan transactions, after the crash, I switched over to Real Estate, but I still found myself helping clients gather information for lenders, which I am still doing today. I have decided to pursue my MLO License. My credit is not the best, will I have any issues getting a license with bad credit in California?

    1. Gustan Cho, NMLS 873293 says

      You are not going to have any problems in California in getting your DBO license. I highly recommend David Reinholtz at http://www.loanofficerschool.com. He has the best NMLS study questions and has a great 20 hour NMLS online program. Go to his website and ask for David Reinholtz. Tell him I referred you to him and he will give you a discount. The best of luck and keep us posted.

  76. KAL says

    Gustan,
    I did mortgages from 2000 to 2009 before the bust. I live in Indiana. I had a judgment put on for 65k. I have since refiled my taxes to fix the bad 1099’s that were sent in by Mtg co’s that went out of business. I now only have an outstanding balance of approx 8k. I am not required to do a payment plan because my income is not high enough. What do you thin my chances are of getting a licence in Florida & Indiana. I plan on moving to Fl next yr.

    1. Gustan Cho, NMLS 873293 says

      You are not going to have a problem in Indiana. You may have an issue in Florida. Florida may require a written payment agreement. If you are not making a payment due to not enough income, you need to provide that to the regulator and that may be good enough for Florida.

  77. Eris says

    Hi Gustan,

    First I wanted to thank you for all your guidance and insights. My situation is that I have 4 derogatory credit cards, 1 has payment arrangement now but the others went to collections, Its all tuition I had to stop paying after my parents lost their jobs and I had to take over the bills and mortgage, and I was not eligible for student loans. My credit score used to be a 763 but they probably don’t care about that. My exam is in mid June, I am in Texas, I will probably be denied in Texas(they seem really rude and unforgiving) . If I pass the the exam in Texas but denied a license here, I can go ahead and apply to other states who are more lenient until I find a state that approves me then I can look for an employer and start working correct?

    Thank You,
    Eris

    1. Gustan Cho, NMLS 873293 says

      That is correct. California, Indiana, Illinois, Colorado, Tennessee, Alabama are some of the states that are less strict than Texas. With Texas, you need payment agreements on collections and charged off accounts or file bankruptcy.

  78. Raymond Van Orsow says

    Hello, 
    I read your article titled ‘Can You Become A Loan Officer With Bad Credit’, and I wanted to reach out and see if you know whether or not I will be approved for a license in the state of Oregon in which I live. My credit is bad, and I’m worried about spending more money without knowing if I’ll be approved or not. Any information you have helps. Thank you.
    Raymond Van Orsow

    1. Gustan Cho, NMLS 873293 says

      You need to clarify what you mean by your credit is bad? Credit scores do not matter. What do you have on your credit report that is so bad? If you have a bunch of outstanding collections, charged off accounts, judgments, maybe you should file bankruptcy. Bankruptcy is fine for you getting your NMLS license.

      1. Ray says

        I have two charged off credit cards that I am financially unable to pay off at the moment. I know how to be responsible with credit card payments but for the last year or so my income has not allowed me to stay caught up the way I need to be. I’ve managed to successfully keep up with my car payment, however. As soon as I am able I plan to pay them off. Is it possible that I can be approved in the state of Oregon for an MLO license with two charged off cards, or will I more than likely be declined? Can I apply more than once if I am able to pay off my credit cards and get to a point where I can reapply for a license?
        Thank you –

        1. Gustan Cho, NMLS 873293 says

          I do not know how strict Oregon is but in California is no problem. Worst-case scenario, you may need to file bankruptcy and/or have a written repayment plan.

          1. Ray says

            How many times are you allowed to reapply for licensure?

            1. Gustan Cho, NMLS 873293 says

              You can reapply as many times as you like. Regulators will tell you ahead of time if they are going to deny you so you can withdraw your license application prior to getting a denial by the regulator.

              1. Ray says

                Thank you for your help. This has benefited me.

                1. Gustan Cho, NMLS 873293 says

                  Unfortunately, I do not know too much about Oregon. Certain states like Texas and Georgia are very tough on collections and charged-off accounts. Other states like California, Indiana, Illinois, New Jersey, Ohio don’t care. Worst case scenario, the regulator will alert you and if they have a beef, then just enter into a written payment agreement for $20 bucks a month with the creditors and you will be fine. Best of luck to you.

  79. Sheila says

    Good morning! I hope you are having a good one. I came across your article in regards to your journey into the mortgage industry. I’ve contemplated entering it for some time. Mentally I’m ready but I’m full of questions and have attempted to reach out to our licensing department however since they work from home now my luck in getting a returned phone call just hasn’t happened or email replied to. I’m hoping you can help me. I live in Tennessee and I’m wondering does state law require for me to have my mortgage license if I only plan on being an intermediary but own a mortgage company? Thanks so much for your time.☺

  80. Brenda White says

    Hello,
    I was on your website and I have a couple of questions. Do you have construction loans for vacation homes?
    We own a piece of land in New Hampshire and are thinking about building a Morton Home. I don’t have set figures but we are hoping to build it for max 150K a 2 bedroom around 1000 sq ft very basic. We’d like to put 20% down so we don’t get hit with PMI, does the land count toward our 20%? Also what would the Debt to income ratio be?

    Thank you for your time.

  81. Bridget says

    Jammi Cash of Gustan Cho Associates went above and beyond in getting me approved on a mortgage in Mobile, Alabama. Jammi Cash and her associate Michelle McCue and Fiona McCue went above and beyond not just getting me qualified by getting me approved with a 581 credit score on an FHA loan. Gustan Cho Associates it’s a government approved firm, they give out mortgage loans to both individuals and companies with an interest rate of 2%. Are you looking for a mortgage loan or a company loan? Any amount you need is available at at Capital Lending Network, Inc, contact them through email: ([email protected] ) I have benefited from them and you can benefit also.

  82. Andy Nguyen says

    Hi Gustan. I’ve recently passed my mlo exam in California and would like to apply for a position. I have one worry though, and that would be my upcoming schedule in 2021. I will be investing in a brick and mortar business in Texas and will be staying there for a few months, however I will not be moving permanently and still be a California resident. Would it be possible to work remotely and originate CA loans even when I am in Texas from time to time?

    Thank you,
    Andy

    Great marketing blog by the way.

    1. Gustan Cho, NMLS 873293 says

      Yes of course. You can work remotely and be licensed in multiple states. Start applying for states now and once you get approved, contact me and let’s talk about onboarding you. What kind of experience do you have? Do you have any loan origination experience in the past?

  83. Ammie says

    Hello!
    I am in Wisconsin, have worked in banking for about a year and am thinking of tying for my MLO (not sure where to even start with that, but that’s another subject!)
    I had a Chapter 7 in 2017, since then I only have a car loan and 1 credit card, all in good standing. I read WI is pretty strict, should I go for it anyway?
    Thank you for your time!

    1. Gustan Cho, NMLS 873293 says

      You are fine and will not have any trouble getting licensed in Wisconsin. Wisconsin is strict with collections accounts, charged off, and judgments. Bankruptcy is fine. You will not have any issues with any states with a Chapter 7 Bankruptcy.

  84. Christine M. says

    Hello Gustan and thank you for this thread. I had an amazing career in the mortgage business which came to a halt in 09 and I ended up having a foreclosure in 12/2011. I want to reenter the business, have passed my test, but am worried about the previous foreclosure to be licensed in CA. By the way, I am financially responsible with a 790 credit score after having rebuilt my career in software sales, but anxious to get back to real estate lending. Will I have a problem, and if so, what states would approve me? I appreciate your response.

    1. Gustan Cho, NMLS 873293 says

      You should be fine. As long as you have a prior foreclosure and do not have a deficit judgment, you should be good in all states. California has one of the most lenient credit requirements. You will not have any issues in getting licensed in California. You have absolutely nothing to worry about.

  85. Kyle says

    Do you know what WA State is currently like? I have two paid off in full collections and one that is in dispute (balance is around $900.00 should be like $300.00). There are a few old (5 year plus) charge offs and a few small recent ones 100% due to COVID 19 Pandemic as i was unemployed for 7 months due to being let go due to the pandemic and my unemployment was peanuts compared to what i was making, so i had to let a few things go. No judgments and no bankruptcies. all my open and revolving accounts are current (three credit cards, an auto loan and a few installment loans). i am worried i will be denied if i apply in WA State…

    1. Gustan Cho, NMLS 873293 says

      You should be fine in Washington to get your NMLS license

  86. A N says

    I have been working for a mortgage company for 3 years now, and I want to get licensed in Texas. But I am worried that my credit might stop me. I have a charged off credit card account from 6 years, and 3 months ago. I opened a card in college, and wasn’t able to keep up with the payments while attending school. Other than that, the only credit I really have is an auto loan that has been paid on time every month. I also have a couple of small personal loans, which are also paid in full, and on time. Do you think the closed credit card account will affect my chances at getting approved for a license? I am worried that if I enter a payment agreement, the statute of limitations will start over and it will remain on my credit report for longer when it is due to fall off by next year. Do you think I should just wait it out? Risk it? Or try paying it off now?

    1. Gustan Cho, NMLS 873293 says

      Texas is one of the toughest states when it comes to derogatory credit. You are not going to have any issues in California, Arizona, or Nevada but will in Texas. You either need to pay it off, enter into a written payment agreement, or file bankruptcy.

  87. Kim says

    I am thinking of changing careers and I am in New Hampshire. My credit recently (within the last 3 years) tanked from the mid 700s to low 500s due to pandemic issues, health issues, and work issues. I am in a tight spot financially and I am concerned on the costs to attain my license only to be denied in New Hampshire. Is New Hampshire a state that is strict with regards to credit ratings?

    1. Gustan Cho, NMLS 873293 says

      Credit scores do not matter. As long as you are making payments or are in a payment arrangement, you should be fine.

  88. A N says

    It is estimated to be removed from my report 7/2022. I am worried if I pay it, or enter an agreement, it will remain on my report for longer and keep effecting my ability to apply for credit.

    1. Gustan Cho, NMLS 873293 says

      Correct. Leave it alone.

  89. Tiffany says

    I am very interested in becoming a MLO but my credit isn’t the best. Do you know anything about how Missouri looks at credit?

    1. Gustan Cho, NMLS 873293 says

      Credit scores do not matter. What type of bad credit do you have?

  90. Taneshia says

    I live in Texas and I’m set to retire from my current job in 9 months. My intentions are to make a career change in the mortgage industry. I don’t believe I will have any problems with my credit. I have one charge off account that has been paid in full and it shows on my credit report as paid. My question is how do I get started in the industry? I’m doing research and I finding everyone is asking for previous mortgage experience. I have experience in consumer lending but that was over 20 years ago. I have even considered taking a loan processor job to get my foot in the door to some companies. I want to work on taking the exam in 6 months so I can be ready to take the exam by the time I retire and move into a new career.

    1. Gustan Cho, NMLS 873293 says

      I recommend you contact David Reinholtz at http://www.loanofficerschool.com. He will guide you in the right path in getting your NMLS license. Getting your license should take you no more than two months maximum. Please contact me after you passed your exam and get your license and we will see if we can enroll you in our mortgage training program.

  91. Taneshia says

    Thank you for the information.

    1. Gustan Cho, NMLS 873293 says

      You are welcome. Please post any questions you may have now or the coming days and weeks.

  92. Sarah Mitzel says

    Hi There! I am studying for my NMLS licensing test. I have 2 bankruptcies on my record. A chapter 7 that was discharged over 10 years ago and a chapter 13 that was discharged in 2017. I have a 99% payment history and a credit score of 725 with no other derogatory marks or collections. I do also have a very high amount of student loan debt.

    Will I have a hard time getting my license in Colorado?

    1. Gustan Cho, NMLS 873293 says

      Bankruptcy is actually good if you have no late payments after bankruptcy. You will not have any issues qualifying for an NMLS license anywhere in the 50 states. Good luck to you.

  93. Jennifer says

    Hi. Thanks for all of your interesting and educational articles!
    Do you know anything about Colorado? My credit is not bad, no derogatory or lates or collections. Etc. just a few high credit card balances. I’m a licensed real estate broker and they did not do a credit report.

    1. Gustan Cho, NMLS 873293 says

      Credit scores do not matter. You will not have any issues getting licensed anywhere. Please reach out to us and do not hesitate to post any other questions you have. Or you can email us [email protected] or 262-716-8151 if you have any other questions.

  94. Lawrence says

    Hi, I was wondering if you have tons of collections not paid , which states will I be able to get approved for? The lender right now i am looking at applying with is licensed in WA, CA, NJ, TX, FL ,OR, NV. Will I be able to get licensed in any of these states? and if so what is the process? Thanks for the help

    1. Gustan Cho, NMLS 873293 says

      It is going to be up to the individual examiner. Uncollected debts and charged off accounts are becoming more scrutinize. FL, TX, NV may be an issue for you to get approved unless you have a written agreement.

  95. Lawrence says

    Thanks for your response. Do you know if California and NJ will have an issue? Or is it a must that i have a payment arrangement setup with those collection accounts. Again thanks for the help

    1. Gustan Cho, NMLS 873293 says

      California used to be a breeze but I have heard examiners denying licensing due to derogatory credit starting last year. You may want to consider filing bankruptcy if you have a lot of collections and/or charged-off accounts. New Jersey has denied licenses for a loan officer applicant due to a charged off account seven years ago. I am seeing more and more states getting strict with prior bad credit.

  96. Lawrence says

    So the best bet is either to file bankruptcy or what if i settled everything on my credit report? Will settling all accounts work to obtain a license? or if setup payment plans with all my collection accounts will that work as well? Unfortunately i cant file Bk due to me being married and my wife wants no part of a BK.

    1. Gustan Cho, NMLS 873293 says

      Bankruptcy is your best bet. Your wife won’t have to be in bankruptcy. You can file it individually. You will not have any problems with bankruptcy. I have helped many folks get credit scores to over 700 FICO in less than one year after bankruptcy. The second option is to get written payment agreements on all of your collections and charged off accounts. Judgments need to be settled and/or written payment agreement.

  97. Lawrence says

    Yeah the problem with California is that she has a property under her name and I believe its common law state. So if i settled all my collection accounts for pennies on the dollar i should be in the clear? I have the money to settle all my accounts , but i dont want to go through with that process and have to pay for the exam if im going to get denied. Some of these items will fall off in a year or so.

    1. Gustan Cho, NMLS 873293 says

      California is hands down the most lenient state. You should be fine in California. Any state will be fine as long as you have a written payment agreement. In California, you can still get approved without paying off the collections and/or charged-off account unless you get a nasty examiner.

  98. Ceci says

    My BK Chapter 7 was discharged last month. Will I be able to get a MLO license?

    1. Gustan Cho, NMLS 873293 says

      Of course. Bankruptcy is good and you will not have any issues getting your NMLS license in any state. I highly recommend David Reinholtz at http://www.loanofficerschool.com.

  99. Jon says

    I’m applying for licensing in North Carolina. But have a bankruptcy 4 years ago. Passed the 24 hour pre licensing course as well as the NMLS Safe test.Credit score in the low 700s. What are my chances?

    1. Gustan Cho, NMLS 873293 says

      Congratulations. Bankruptcy is good. You will not have any issues with getting your NMLS license anywhere.

  100. Mickeyblue says

    Hi, Thank you for this article. I am taking the NMLS test this month in Nevada. I am feeling great about the test, but I just learned about the credit check and that makes me nervous. In 2017 I signed for a car for my boyfriend. He stopped making payments and they repossessed the car. My credit score is 635-657. I have student loans but those are “frozen” right now due to Covid. Do you have any knowledge of how Nevada reviews creditworthiness?

    1. Gustan Cho, NMLS 873293 says

      The worst thing that may happen is for the regulator to have you enter into a written payment agreement. Or file bankruptcy. The examiner will let you know your options before taking action.

  101. Fred says

    Hi Gustan,

    I really hope you can help me. I have about 50k in student loans, after I graduated I struggled to make much money at all and have been skating by on my ass barely able to pay rent and other bills. I live in Seattle Washington and have yet to make a payment on my student loans from the University of Washington. Besides my student loans, I should dont have anything else on my transunion credit report. I would like to get my MLO license, will I be able to do so?

    1. Gustan Cho, NMLS 873293 says

      As long as your student loans are not in arrears and you are on deferment and/or payment plan, you should be fine.

  102. Jimmy says

    Hi Gustan,

    I am in Missouri and looking to start a career as an MLO. My recent credit report is about 655 and I have 6 charge offs showing. One of them is from a credit card that we negotiated a lower amount and I am making payments on. Would it be worthwhile to go through the process of becoming an MLO or are my chances of getting licensed in Missouri so low that I should reconsider? Thanks for your insight.

    1. Gustan Cho, NMLS 873293 says

      Collections and charged-off accounts may need to be entered into a written payment agreement with the creditor. Or if they are of high balance, you should consider filing for bankruptcy. Bankruptcy is good because it will clear all of your debts. Certain states like Texas and Georgia and most east coast states will require that you either pay off the outstanding debts or file bankruptcy.

  103. Ashley says

    Hi Gustan,

    I am in Washington State and I recently passed my exam and wanted to move forward with obtaining my license. I applied for a position in which they advised that I had two negative items that needed to be taken care of in order to proceed however this position was for out in Denver, CO. One of which is a charge-off. I have since set up a payment arrangement for the one collection and I am waiting to hear back regarding the charge-off. Would it be ok for me to go ahead and submit for my license or should I wait and provide documentation for both negative items mentioned.

    Thanks

    1. Gustan Cho, NMLS 873293 says

      Go ahead and start the application process. Some states are more strict on collections and charged off accounts than others. As long as you have set up a written payment agreement with creditors, you are not going to have any issues with any states. California is one of the most lenient states in getting licensed with bad credit.

  104. Stephanie G says

    Thank you so much for this blog and your honesty. Do you happen to know how challenging it would be to get an Originator’s license in Michigan?

    1. Gustan Cho, NMLS 873293 says

      What is your question specifically? Credit scores do not matter in any states. Certain states like Texas and Georgia are really strick with derogatory credit items. All states are cracking down with outstanding collections and charged off accounts. Worst case scenario, you may need to enter into a written payment plan with the creditor depending on the NMLS examiner. They are not going to deny your license without first givng you the opportunity to withdraw your application. If you have a lot of collections, charged off accounts, judgments, you may want to consider filing for bankruptcy. Bankruptcy gives you a fresh start and chance to rebuild your credit.

  105. Jimmy says

    Gustan,

    I have a payment plan with a creditor and 5 charge offs with zero balance from about 6 years ago. Would that disqualify me from getting a license in Missouri?

    1. Gustan Cho, NMLS 873293 says

      You will be fine. Credit scores do not matter. As long as you have a written payment agreement with the creditor, you are financially responsible and of good character.

  106. Fabricio Castellanos says

    Good Afternoon Gustan, I plan on getting licensed for Illinois and Texas. The only issue I have is that I have a collection/charge-off that has been already paid off, but it still shows on my credit report. Will I have any issue with getting my license in Illinois or Texa?

    1. Gustan Cho, NMLS 873293 says

      As long as the charged-off account is paid off you will get licensed in both states. Texas is a stickler with outstanding collections and charged-off account but as long as it has been paid off, you are fine. The best of luck to you.

  107. John Davidson says

    Really like your blog. I am applying for MLO license in VA. I have one derogatory mark and a few credit charge-offs. Do you think I can still get approved in VA? Should I send letter of explanation and financial statement? What is a good way to approach the letter?

  108. Piotr Carlucci says

    I would wait until what the examiner says. The examiner may want a letter of explanation or may require you set up written payment agreements with the creditors. I would not volunteer any information and only provide what is asked and not more.

  109. Jon Smith says

    I’ll try to be short and to the point. I currently live in Florida. Credit is hovering around 600. +/_ 20 points depending upon the month. 3-4 derogatory remarks. (i’m happy to take care of) My biggest concern is i have Federal Tax Liens against me for 2008, 2009, 2010 & 2011. I fought it with a lawyer and think the process was finished 2013. I work minimum wage jobs and have no hope to ever pay them off. My best bet is to wait out the 10 year statue of limitations. (2023?) How would this affect me in obtaining my NMLS? I am seeking a career change to Mortgage Underwriting. Also, i would like to move to Wisconsin (asap) where my family resides.
    Thank you

    1. Gustan Cho, NMLS 873293 says

      You are not going to get your NMLS license with a federal tax lien unless you have a written payment agreement and are making minimum monthly payments.

  110. Courtney Harris says

    Dear Gustan,

    Thank you so much for writing the article “Can You Become A Loan Officer With Bad Credit And Get Licensed”.
    My questions was specifically for the state of Arizona and if you had any insight into whether their guide lines are strict. I am 34 years old, and my parents never taught me financial education, therefore up until about 3 years ago I did not make the best financial decisions. It took me discovering Audible, and a lot of financial books later to learn what its like to be financially responsible.
    My score I would say is about 540, and has been that way for most of my life, due to my younger self poor decisions. I do not have any foreclosures, or car repo’s or anything too crazy. I mostly have two credit cards that were around 3k each go to collections and charged off on my report because I could not afford the payments. I worked as a vet tech making less than 16 an hour up until about a year ago, when I was able to finally secure a 20$ position still on a W2, so not much income still.
    Since february, I switched and started working as an assistant to a business broker as a 1099 employee. That has somewhat of a promising future, however everything is based on how many deals we close a month, which isnt a very secure position for me. I just took an Arizona Real Estate Course of 90 hours and passed the school exam. I would need it to pursue becoming a business broker. However I was looking at my options and I would be much happier and more secure with a Mortgage Loan Officer position.
    Based on my credit score, that scares me and Im wondering how strict Arizona guidelines are.

    I apologize this message is so long. I thank you ahead of time for being so kind and helping so many people reach their potential.

    Hope you have a wonderful evening, and I look forward to your response.
    Best Regards,
    Courtney Harris

  111. Triston says

    To be honest, no state or regulatory agency should give anyone a license to financially advise consumers which mortgage loan to get when the LO has a credit scores below 620. There is no excuse, reason or waiver because you owned $6 million of real estate or more. This is absurd.

    I applaud Wisconsin for maintaining a standard. Florida is always at the top for scheming criminals and always #1 for ID theft. They maintain a policy and a bad pattern of allowing sub-par applicants to get a license or job they should not have.

    People with chronically bad credit are not usually one-time offenders. It is a pattern of making irresponsible choices. I also lost real estate in a short sale during the crisis but I didn’t let my other consumer debt go to hell. So,my credit score remained high

    It’s like having a fat person being your personal fitness trainer or an illiterate HS dropout teaching foreigners English. Seriously look at it from that perspective. Opportunities should be given when you meet that standard, a respectable credit score> 620, being in avg. to decent shape, HS grad or GED etc. not before.

    Thank god there’s 1st tier companies that want LO’s to have a BA degree and minimum credit scores.
    This is terrible , irresponsible, and very concerning reasons why the industry has high turnover and jokes about LO’s..

  112. Triston says

    Having said that. I think you do have a lot of knowledge about many loan products but the NMLS and states need to have a hard line credit score “minimum” for all applicants to become licensed. Like a GPA to get into college, it must be followed. Or at the very least upon license renewal you need to have a 620+score.

    Please do not encourage bad credit LO’s into the industry. You are promoting a disservice to consumers to have someone unqualified to advise borrowers about their credit. There are millions of people with bad credit and they remain that way most of their life due to poor decisions.

  113. J W says

    Do you have to finish the chapter 13 and get the discharge before starting the career as a MLO? Or can I start pre-discharge?

    1. Gustan Cho, NMLS 873293 says

      You do not have to wait until your Chapter 13 bankruptcy discharged date. You can get your license in any state during the Chapter 13 bankruptcy repayment period.

  114. JS says

    I live in Califorina, and just shy of my 61st B-Day. Recently lost my entire business due to the Covid Pandemic. Nothing Left ! Currently in a BK but not yet filed. There were some business as well as some personal debts on the BK. I really want to become a licenced MLO. Would I be looking at any problems getting licenced ?

    1. Gustan Cho, NMLS 873293 says

      Bankruptcy is good. You will have no problem in getting licensed in any state after bankruptcy.

  115. Rae C. says

    Hi, do you offer remote positions in Ohio and Arizona with your agency?

    1. Gustan Cho, NMLS 873293 says

      We are licensed in Ohio but not yet in Arizona. We are only hiring experienced loan officers at this time. Two years of full time experience only.

  116. Bruce says

    I’m interested in getting licensed in California, but I have student loans. Will this be an issue for me?

    1. Gustan Cho, NMLS 873293 says

      Why would student loans be an issue? Do you mean delinquent student loans?

  117. Bruce says

    Yes, I believe they may be delinquent.

    1. Gustan Cho, NMLS 873293 says

      You cannot have delinquent federal debt in most states. However, California is very lenient and I have seen people with tax liens and judgments get approved in California.

  118. Amanda says

    Your ads reach far, sir! Upon reading your company’s mission statement, a great fit. I believe timing is everything. I’ve completed courses for CA, TX, TX, MI & FL. Completing WA, HI & OR next (NV is on hold unfortunately at this time). More soon. Thanks much, Have a fantastic week!

  119. Joey Wilson says

    Is it really worth to become a MLO? like what kind of income potential can i see if i was to obtain my License in the first year? and do i have to work under someone to have success? Thank you

  120. Jason Tessler says

    I am in the New England area, most of my issues came 5-6 years ago when I went through a divorce. Are you familiar with how strict Ma, NH, CT, RI, Maine and Florida are? I’ve already passed the National test and have finished all the state content.

    1. Gustan Cho, NMLS 873293 says

      California is the easiest state. What type of bad credit do you have?

  121. Dan says

    I’m looking to get my license in the state of Kansas and Missouri. I have a credit score of 570 from Experian with one Judgement at $6000 and currently late on 2 cards for, 3 months behind and that’s it. Do you think I’ll get approve?

    1. Gustan Cho, NMLS 873293 says

      You may have to enter into a written payment agreement with your judgment. Late payments and credit scores do not matter. Or you can file bankruptcy and wipe those debts off and you will not have any problems in any state.

  122. Dominick says

    I’m 20, I live in Texas I Currently have 3 things in collections that total less then 1k and my credit is right under a 600, if I pay them off before I start the course in July do you think I will be ok? Any help is greatly appreciated thank you!

    1. Gustan Cho, NMLS 873293 says

      As long as you pay them and/or enter into a written payment agreement, you will be fine in getting your NMLS license in Texas.

  123. dominick says

    Ok great, I’m really thankful that you responded even though I asked the same basic question you’ve answered a million times. I was just a little panicked after reading a lot of the previous comments about the Texas NMLS. But you’ve made me much more confident about the situation. Thanks again!

    1. Gustan Cho, NMLS 873293 says

      The best of luck to you. Please don’t hesitate to ask any other questions you may have.

  124. Jessica Cesar says

    Hello Gustan,

    I want to apply for a FL MLO license. I saw that you mentioned that FL is getting tougher with credit. My credit score is 600. I don’t have any late payments or charge offs, but I have a lot of credit card debt. I pay for interest only every month until I can actually start making bigger payments. I usually pay the minimum for my cards on time every month (sometimes I’m one or two days late). Do you think I’m going to have my license approved? Thanks!

    1. Gustan Cho, NMLS 873293 says

      Credit scores do not matter. You should be fine. Good luck to you.

  125. Jessica says

    I am preparing to be licensed in Texas. If there are multiple credit collections with late payments, charge offs, and third party debt agencies, does every listed account need to be resolved by pmt plan or pd before being approved? I am also concerned about the turn around time as well for credit, licensing, then closing your first loan. Would these steps take 6months?

    1. Gustan Cho, NMLS 873293 says

      Jessica, in Texas, you need to have settled all of your outstanding collections, charged-off accounts, and have all the late payments current or they will not grant you an NMLS license. You should consider filing Chapter 7 bankruptcy. The bankruptcy will resolve any credit issues of the past and give you a fresh start. You will have no problems in getting licensed after bankruptcy. It normally takes 30 days from application to closing and you getting paid.

  126. Bry says

    Hi I wanted to ask is there a specific credit bureau that the state of Texas Uses to for Credit Validation?

    1. Gustan Cho, NMLS 873293 says

      All credit bureaus used are contracted by lenders and the states have nothing to do with it.

  127. Wes says

    Do you know how strict Kentucky and Indiana are on credit report? Does being employed by certain lenders help with the credit and background checks?

    1. Gustan Cho, NMLS 873293 says

      Can you please clarify your question? I do not understand your question.

  128. Josiah Pahnke says

    I used to be able to find good advice from your articles. My husband and I are looking to get a mortgage but our credit is poor and we are thinking on signup for bankruptcy But want to know if we would still qualify for the mortgage?

  129. Kristina Nguyen says

    I am wanting to be a MLO in Oklahoma. How strict is it? I do have judgement with a monthly plan, charged off and my credit score is pretty bad. But this is all from 2016.

    1. Gustan Cho, NMLS 873293 says

      As long as you have a written payment plan on judgments, collections, and charged-off accounts, you will be fine. You should consider filing bankruptcy and that way you will have no problems in any states getting your NMLS license.

  130. Stephanie says

    I live in Texas and want to apply with a large bank as a mortgage underwriter, but I have to go through SAFE background and credit check. I’m concerned about passing the credit check. I’ve had 3 dismissed bankruptcies last one was over 15 months ago. I have collection accounts, tax lien and late on 2 current loans. My mortgage auto loans and a couple credit cards have been paid on time for more than 12 months. My credit overall is very bad. Do you think it will be a problem?

    1. Gustan Cho, NMLS 873293 says

      Tax liens and outstanding delinquent debts need to be on a written payment agreement and current. Up to date. Or need to file bankruptcy. No late payments during and/or after bankruptcy.

  131. Wes says

    You’ve suggested which states are difficult to pass the credit checks and which are not. How difficult is it to pass the credit checks in IN, KY, and TN?

    1. Gustan Cho, NMLS 873293 says

      All states have rigorously tightened up on credit checks. Credit scores do not matter. If you had missed a bunch of payments and finally caught up or are making efforts to catch up, you will be fine. If you have outstanding collections and charged-off accounts, most states will now request that you enter into a written payment agreement with the creditors. For example, New Jersey used to be one of the most liberal states in where you can get your NMLS license with outstanding collections and/or charged-off accounts. Now, New Jersey asks that you enter into a written payment agreement with the creditors. In the past, many states let older collections and charged off accounts slide. However, I know most states have tightened up with credit checks. Or if you have a larger outstanding collection balance, you may want to explore bankruptcy. Bankruptcy will not deter you in getting licensed in any of the 50 states. The best of luck to you.

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