Why does the MHIC review your credit report?
Short answer. To judge your financial responsibility. COMAR 09.08.01.19 makes a credit report part of licensing and renewal, so answer the Commission's questions promptly and show how any problem was resolved; ignoring them is a separate violation.
- COMAR 09.08.01.19
- COMAR 09.08.01.27
Work it through
You're the contractor. Pick what you'd do, then see how each choice plays out.
During your license renewal process, the MHIC reviews your credit report. It shows two late payments on your business line of credit and a collections account from a materials supplier you forgot about.
The Commission sends you a letter requesting an explanation.
- Correct
COMAR 09.08.01.19 requires a credit report as part of the licensing process. The MHIC uses it to assess financial responsibility. Two late payments aren't necessarily disqualifying, but a collections account is serious. Responding promptly with documentation of resolution and current solvency demonstrates accountability. The Commission is more likely to approve renewal when you acknowledge problems and show they're fixed.
- Wrong
Your credit report IS the MHIC's business during licensing and renewal (COMAR 09.08.01.19). Financial responsibility is a licensing requirement. Ignoring the Commission's request triggers COMAR 09.08.01.27 (Failure to Respond), which is an independent basis for disciplinary action. You've now turned a credit explanation into a non-response violation.
All 10 mhic licensing & renewal questions
- What should a new MHIC contractor do before the first job?
- What happens if your contractor liability insurance lapses in Maryland?
- How do you meet the MHIC financial solvency requirement at renewal?
- What does the MHIC require to renew a contractor license?
- Do you need to update your MHIC license when you form an LLC?
- Do you have to tell the MHIC when your business address changes?
- What if the MHIC lookup shows your old business name?
- Why does the MHIC review your credit report?
- Can unpaid supplier bills put your MHIC license at risk?
- How should a contractor respond to an MHIC compliance audit?