SuretyBonds.com has developed this comprehensive licensing guide to explain how to get licensed as a credit services organization in California.
California Civil Code section 1789.25 requires credit service organizations to maintain a certificate of registration from the California Department of Justice. To qualify, applicants must provide all required documents in an application package for Department of Justice review.
Who needs a credit services organization business license in California?
Credit service organizations provide services that help customers extend their credit lines, improve their credit rating, or prevent mortgage or other security agreement foreclosure.
If your business falls under these criteria, this guide will walk you through becoming a licensed credit service organization in California.
What do I need to apply as a credit services organization in California?
Before you can submit your application, you must provide the following:
- Name and address of business operations
- Names, addresses, and driver’s license numbers for every person who owns at least 10% of stock shares in the organization
- Transcripts and copies of all advertisements
- Financial statements
- $100 filing fee made payable to the California Department of Justice
- California credit services organization surety bond in the amount of $100,000
Why does the Department of Justice require surety bonds for credit services organizations?
California credit services organization surety bonds ensure that the principal company complies with Title 1.6E, Part 4 of Division 3 of the Civil Code of California, which prohibits violations such as:
- Collecting money before fulfilling credit services for a buyer
- Not performing services within 6 months of contract signing
- Removing accurate information from a buyer’s credit report
- Creating new credit cards for buyers with different information
- Advertising before registering with the Department of Justice
California requires licensees to maintain credit services organization bonds in the amount of $100,000. If a bonded license holder fails to comply with the terms of the surety bond, they will be held liable for damages paid by the surety as a result of filed claims. Put another way, surety bonds provide financial protection to consumers in the event their credit repair company or credit counseling service provider doesn’t operate according to the laws regulating the credit services industry.
How do I purchase and file a California credit services organization surety bond?
You can submit a California credit services organization surety bond application online 24/7. Your surety bond cost for a credit services organization bond will be based on an underwriter’s credit review. Once you’ve paid your credit services organization bond invoice, you’ll receive your official digital surety bond documents via email.
To file your surety bond with the California Secretary of State, mail your official bond documents and $30 filing fee to:
California Secretary of State
P.O. Box 942870
Sacramento, CA 94277-2870
Your certificate of registration for credit services organization licensing cannot be approved until the Secretary of State has accepted your surety bond.
How do I submit my credit services organization license application to the Department of Justice?
Once you’ve met all of the requirements, send the completed application to the Department of Justice along with your $100 fee, a copy of your contract, information statement, a separate notice of cancellation, and all other documents as outlined above.
Mail your application package and $100 filing fee to:
Department of Justice
Attorney General’s Office
P.O. Box 85266
San Diego, CA 92186-5266
How do I renew my California credit services organization license?
All certificates of registration expire annually on December 31st. Renew your license with the Department of Justice before the first of each new calendar year to keep your business in compliance. Note that the state does not send renewal reminders to business owners.
How do I get a surety bond for a credit repair organization in California?
If you’re a California credit services organization looking for a surety bond provider, you can submit an online application 24/7 or call 1 (800) 308-4358 to speak with a surety bond expert about your free, no-obligation quote.