Mortgage Loan Originator (MLO) Licensing Practice Test

The term used to describe entities that sell information regarding an applicant's credit is "consumer reporting agencies." These agencies are responsible for compiling and maintaining various types of consumer information, including credit histories. They gather data from financial institutions, public records, and other sources, which they then report to lenders and other businesses that need to assess the creditworthiness of individuals.

Consumer reporting agencies play a critical role in the lending process, as they provide lenders with the information necessary to make informed decisions about extending credit. This data is often summarized in credit reports, which include a consumer's credit score and an overview of their credit accounts, payment history, and any delinquencies.

In contrast, credit analysts are professionals who assess financial data and credit reports but do not sell the data themselves. Financial institutions are organizations that provide loans and credit services but are not solely focused on reporting credit information. Underwriters review and assess loan applications based on the information provided, including credit reports, but they are not the entities that sell this information. This distinction clarifies why "consumer reporting agencies" is the correct term for those entities.