What qualifies as a credit service organization (CSO)?
A credit service organization (CSO) is regarded as a business that charges fees to customers in an effort to obtain an extension of credit, improve a person’s credit rating or prevent foreclosure of a mortgage or security agreement.
Credit services organization bonds are known by several different names, such as CSO bonds, credit repair services bonds and credit counseling organization bonds. It’s important to note how a credit service organization bond is different from a debt management service provider bond.
How do credit service organization bonds protect consumers?
State government agencies often require credit service organizations to purchase surety bonds before they are registered and licensed as legal businesses. The purpose of a credit service organization bond is to ensure a credit service organization works ethically and in accordance with laws. Each bond issued is a legal contract binding three entities together.
- The principal (you) purchases a CSO bond and pledges to do their job according to licensing laws and other applicable industry regulations.
- The obligee (the state) requires you to purchase a surety bond, so it can regulate the industry and protect consumers from potential financial losses.
- The surety (the insurance company) issues the bond and provides a financial guarantee ensuring the quality of your future professional performance.
If you fail to fulfill the specified terms in the contract, the bond amount can be used to reimburse consumers and government agencies who suffer from financial losses.
State specific costs
Bond amounts and regulations surrounding each license are established at the state level. Therefore, the costs and requirements for credit service organization bonds vary greatly from state to state. Select your state below for more information about credit service organization bonds in your area or call 1 (800) 308-4358 to speak with a surety expert.
How much will a credit services organization bond cost?
Premiums vary depending on your personal application and the amount of protection you need. If an applicant needs a credit service organization bond for $25,000 or less, the premium will be strictly credit based.
Applicants who have credit scores at or around 700 qualify for the standard market. These individuals will pay a premium that’s calculated at 1.5 to 5 percent of the bond amount. On the other hand, applicants with credit scores below 700 fall in the nonstandard market, meaning they will pay a premium that’s calculated at 10 to 25 percent of the bond amount.
CSO bonds written for more than $25,000 typically involve a slightly more in-depth underwriting process, which may require additional documentation from the CSO owner(s). As a result, the premium may vary depending on personal qualifications, such as previous work history.
How do you apply for a credit repair services bond?
If you need a credit service organization bond, contact SuretyBonds.com online or by phone at 1 (800) 308-4358. When you apply for this bond, you’ll need to provide the following information:
- The company’s legal name
- Your state’s required bond amount
- The credit scores of all owners
No matter your financial standing, our team at SuretyBonds.com will offer you the lowest rate available. After a quick application, your surety specialist will shop your bond with our premier underwriters and get you a price quote within one business day. Once you’ve paid your premium, your bond will be executed immediately and mailed. If you need the original bond form tomorrow, choose our overnight shipping option.