What is a California Credit Services Bond?
The California credit services bond is required by the Credit Services Act of 1984. Specifically, you may find the bonding requirement in CA Civil Code 1789.10-26. This surety bond protects the citizens of California against fraud, errors, and omissions caused by the credit services company which causes financial harm. Additionally, the bond protects against other violations by the credit services organization as defined in the previously mentioned CA civil code.
How do I apply for a California Credit Services Bond?
- Complete our online California Credit Services Bond application, or
- Download and complete our printable California Credit Services Bond application, and
- Receive your surety bond quote in minutes!
What California Credit Services Bond amount do I need?
The California Secretary of State requires a credit services company to maintain a credit services bond amount of no less than $100,000.
Who needs a California Credit Services Surety Bond?
The California credit services organization bond is required of all companies who wish to provide credit services in the state of California.
What is a Credit Services Organization?
A California credit services organization is defined as a person who will perform the following services for a fee:
- Improving a buyer’s credit score or history;
- Obtain a loan or credit for the the buyer; or
- Provide assistance in improving a buyer’s credit history or obtaining a loan for the buyer of their services.
However, the following companies and individuals are specifically excluded from the definition of a credit services organization:
- Banks and savings companies who are insured by the FDIC;
- License real estate brokers;
- People who are authorized to loan money and are regulated by the state;
- Lawyers who are not employed by a credit services organization;
- SEC or CFTC broker/dealers; and
More information about exempt businesses or organizations can be found by referencing CA Civil Code 1789.12.
How long does the California Credit Services Bond need to be in place?
The credit services surety bond must be in place for a minimum of two years. Additionally, the credit services bond must be in place for an additional two years following the last day the company does business in the state.
How much does the California Credit Services Bond cost?
The bond amount varies depending on the credit services company’s financials, experience, and the personal credit score of the owners. In most cases, well-qualified companies can expect to pay $1,000-$2,000 in premium each year the bond is in effect. New businesses lacking experience may see higher premium requirements.
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