Mortgage Loan Originator (MLO) Licensing Practice Test 2025 - Free MLO Practice Questions and Study Guide

Credit reports have a validity period of 120 days after they are pulled for qualifying purposes. This extended timeframe allows lenders to rely on the information gathered during the loan application process, ensuring that the borrower’s credit status is still considered recent enough to inform lending decisions. After this 120-day period, if no action has been taken to finalize the loan, lenders may need to pull a new credit report to ensure they have the most up-to-date information about the borrower's creditworthiness.

Shorter validity periods, such as 30, 60, or 90 days, do not provide borrowers with sufficient time to secure financing or complete their loan applications before needing to update their credit reports. This could lead to unnecessary delays and complications in the loan process. Therefore, the 120-day validity is designed to accommodate the typical timeline for mortgage applications, allowing both lenders and borrowers to proceed with a reasonable level of confidence regarding the credit information used in the decision-making process.