What is a Credit Service Organization Surety Bond?
Credit Service Organization Surety Bonds are issued to businesses which charge their clients a fee in order to obtain an extension of credit for the purpose of improving or preserving their credit rating.
In doing so, their clients are more likely to be issued a loan, as well as being able to prevent or delay the foreclosure of a mortgage or other security agreements. Credit Service Organization Surety Bonds protect these clients against fraudulent actions made on behalf of credit services, which could result in financial losses. These surety bonds ensure that all credit service organizations fully comply with all applicable laws and regulations.
Which states require Credit Service Organization Surety Bonds?
Pacific Surety proudly offers Credit Service Organization Surety Bonds in the following states:
- Arizona
- California
- Indiana
- Iowa
- Kansas
- Massachusetts
- Nebraska
- Nevada
- New Hampshire
- Ohio
- Oklahoma
- Pennsylvania
- Tennessee
- Texas
- Utah
- Virginia
- Washington
- Washington, D.C.
- Wisconsin
If you do not see your state listed, please contact us and our knowledgeable underwriters will assist you.
What is the bond amount for Credit Service Organization Surety Bonds?
Bond amounts for Credit Service Organization Surety Bonds vary and are set by the local rules and statutes regulating the industry. Therefore, bond amounts and requirements will fluctuate from state to state. Please contact us with specific questions, and our knowledgeable underwriting staff will assist you.
How much does a Credit Service Organization Surety Bond cost?
Pricing for Credit Service Organization Surety Bonds will vary, and your premium will be based on the following factors:
- State the bond is required in
- Amount of the bond
- Term length of the bond
- Personal credit for anyone with at least a 10% ownership stake in the business
Individuals with good credit can expect to pay between 1%-5% of the bond amount. Qualified applicants could pay as little as $100 annually for a $10,000 Credit Service Organization Surety Bond. To find out how much your bond is going to cost, please complete our online application for your free, no obligation price quote.
Can I get a Credit Service Organization Surety Bond with bad credit?
Pacific Surety offers a wide range of approvals, regardless of credit, for Credit Service Organization Surety Bonds. With our strong surety relationships, we have the ability to approve 99% of applicants, regardless of how bad their credit is. Our knowledgeable underwriting staff will work with you to ensure you receive the lowest possible pricing for your bond. Applicants with substandard credit can expect to pay 5%-10% of the bond amount in premium. To see what rate you will qualify for, please complete our online application for your free, no obligation price quote.
How do I purchase a Credit Service Organization Surety Bond?
The first step is to complete our quick online application for your free, no obligation bond quote. Submission takes only five minutes, and our underwriting staff will be in contact with you within a couple of hours with pricing. If you prefer to speak with our knowledgeable staff, please call 1-866-722-7873 and one of our Underwriters will assist you in applying for your bond.
After you receive approval, you must sign an indemnity agreement with the surety and provide payment for your bond premium. In most cases, we can issue bonds the same day we receive your signed documents and payment.
Who does a Credit Service Organization Surety Bond protect?
Unlike insurance, which protects you, your home or your business, Credit Service Organization Surety Bonds protect the obligee (entity requiring the bond). If the principal (licensed wholesaler) does not fully comply with all applicable laws and regulations, a claim can be filed by the obligee with the surety company for relief. If the claim is valid, the surety will pay up to the penal sum of the bond to resolve the claim. You are then required to reimburse the surety for all monies paid out, including any attorney fees incurred by the surety in the defense of the claim.
Claims can be detrimental to your business. Not only do they cause financial harm, they make it very difficult, if not impossible, to get bonded again.