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

Question: 1 / 605

What must a borrower do to avoid having late payments reported to a credit bureau?

Pay within 60 days of due date

Pay within 30 days of due date

To avoid having late payments reported to a credit bureau, a borrower must make their payment within 30 days of the due date. Creditors typically report late payment information to credit bureaus if payments are overdue by at least 30 days. This timeline is crucial because it can significantly impact a borrower's credit score and overall credit history. Payments made within this 30-day grace period are not considered late and therefore do not negatively affect the borrower's credit report.

Making a payment after the 30-day mark would result in a late payment being reported, which can lead to financial repercussions such as an increased interest rate and a decrease in credit score. Simply paying the minimum payment is not sufficient to prevent a late report if the payment is not made on time; the timing of the payment relative to the due date is what is critical.

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Pay after 30 days of due date

Pay the minimum payment only

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