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

California NMLS Licensing

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

This BLOG On Can You Become A Loan Officer With Bad Credit And Get Licensed Was UPDATED On October 4th, 2018

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 on 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
  • 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
  • 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

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
  • Sub prime mortgage lending was one of the largest mortgage lending sectors in the mortgage banking industry
  • All sub prime lenders like Countrywide and Washington Mutual literally went bankruptcy overnight
  • With the shutdown of these giant corporations, was 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 a NMLS certified 20 hour pre-licensing course
  • They needed at least a 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 their own licensing requirements which includes 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
  • 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 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
  • 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

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 the 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 with 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

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 everyday 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

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

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
  • Reason I do not qualify is because I have multiple outstanding judgments which is recorded on Kenosha County public records
  • I told her that the judgments was 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

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 gcho@gustancho.com. I am available 7 days a week, evenings, weekends, and holidays to take your phone calls and answer all of your questions.

115 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. 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

    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 gcho@gustancho.com.

      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.

  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

    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

  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 gcho@gustancho.com
      Toll Free Direct 800 900 8569
      Cell 262 716 8151

  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 gcho@gustancho.com 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 gcho@gustancho.com

      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

  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 mgracz@gustancho.com.

  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.

  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 gcho@gustancho.com 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 gcho@loancabin.com. 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.

  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 gcho@loancabin.com. 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.

  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.

  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 gcho@loancabin.com 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?

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