NMLS Background Check Process: What to Expect

The NMLS background check includes FBI fingerprint-based criminal history and a credit report review. These checks protect consumers and ensure MLOs meet character standards. Understanding the process helps you prepare and address any potential issues proactively.

Background Check Components

Criminal Background Check

The FBI check includes:

• Federal criminal records: All federal jurisdictions
• State criminal records: All 50 states
• 10-year lookback: For most offenses
• Lifetime lookback: For certain financial crimes

Credit Report Review

Your credit report is evaluated for:

• Payment history
• Outstanding collections
• Tax liens
• Judgments
• Bankruptcies
• Overall financial responsibility

The Fingerprinting Process

How to Get Fingerprinted

1. NMLS authorizes: After you initiate application
2. Select provider: Usually MorphoTrust/IDEMIA
3. Schedule appointment: Online or walk-in
4. Visit location: Bring valid ID
5. Pay fee: Typically $36-40
6. Results sent: Directly to NMLS (2-4 weeks)

What to Bring

• Government-issued photo ID
• Payment (credit card, debit, or check)
• NMLS ID number
• Confirmation number (if scheduled)

Fingerprint Locations

Find locations through:

• NMLS website
• IdentoGO by IDEMIA
• Some UPS stores
• Local law enforcement (varies)

Criminal History Considerations

Automatic Disqualifications

Certain convictions prevent licensing:

• Felony involving fraud, dishonesty, or breach of trust: Ever
• Financial services-related felony: Within past 7 years
• Any felony: Within past 7 years in many states

Case-by-Case Review

Many offenses are reviewed individually:

• Misdemeanors
• Non-financial felonies (older than 7 years)
• Expunged or sealed records (varies by state)
• Pardoned offenses

Factors Considered

When reviewing criminal history:

Factor	Impact
Time since offense	Longer = better
Nature of offense	Financial crimes weighted heavily
Rehabilitation evidence	Helpful
Honesty in disclosure	Critical
Pattern vs. isolated incident	Pattern = concerning

Credit Report Evaluation

What’s Reviewed

• Payment history: Late payments, defaults
• Collections: Outstanding amounts
• Public records: Bankruptcies, judgments, liens
• Credit utilization: Debt-to-credit ratio
• Recent inquiries: Credit-seeking behavior

Credit Standards

There’s no universal minimum credit score, but:

• States and employers have varying standards
• Derogatory items are scrutinized
• Unresolved issues raise concerns
• Pattern of financial irresponsibility problematic

Credit Issues That May Affect Licensing

Issue	Concern Level
30-day late payments	Low
60-90 day late payments	Moderate
Collections	Moderate-High
Charge-offs	High
Bankruptcy	High
Tax liens	Very High
Judgments	Very High

Disclosure Requirements

What You Must Disclose

On the MU4 application, you must disclose:

• All criminal charges: Even if dismissed
• Civil judgments: Financial-related
• Regulatory actions: Any licenses affected
• Outstanding liens: Tax or otherwise
• Business failures: Bankruptcies, failures

Honesty Is Critical

Never fail to disclose: Even if you think it won’t be discovered.

• NMLS searches multiple databases
• Non-disclosure = automatic denial in most cases
• Honesty about past issues is often better than the issue itself

If You Have Concerns

Before Applying

1. Review your own records: Get criminal background and credit reports
2. Identify potential issues: What might flag?
3. Consult an attorney: If serious concerns
4. Prepare explanations: Written, factual, remorseful if applicable

Addressing Issues Proactively

For criminal history:

• Get all court documents
• Write explanation letter
• Show rehabilitation (education, employment, references)
• Consider expungement if eligible

For credit issues:

• Address outstanding collections
• Create payment plans
• Document improvement efforts
• Write explanation of circumstances

The Review Process

Timeline

Step	Duration
Fingerprint processing	2-4 weeks
Credit report pull	Immediate
State review	2-6 weeks
Total process	4-10 weeks

If Issues Arise

If your background check reveals concerns:

1. State contacts you: Requesting additional information
2. You respond: With documentation and explanation
3. Review continues: State evaluates response
4. Decision made: Approve, deny, or conditional

Conditional Licensing

Some states may:

• Issue with monitoring requirements
• Require supervisor approval
• Set probationary period
• Mandate additional bonding

State Variations

More Restrictive States

Some states have stricter requirements:

• Lower felony lookback periods
• Stricter credit standards
• More categories of disqualifying offenses

More Lenient States

Others offer more flexibility:

• Case-by-case review
• Expungement recognition
• Rehabilitation emphasis

Research your specific state’s standards.

Maintaining Good Standing

After Licensing

Your background is checked at renewal:

• Annual NMLS renewal process
• Continuing disclosure obligations
• Must report new issues promptly

Ongoing Obligations

• Report arrests within 30 days (most states)
• Report civil judgments
• Update NMLS with changes
• Maintain financial responsibility

Key Takeaways

• FBI fingerprint check and credit report are required
• Full disclosure is mandatory and critical
• Past issues don’t always prevent licensing
• Rehabilitation and honesty matter
• States vary in their evaluation standards

Start your licensing journey informed about these requirements. Visit our state guides for specific state standards.