What is a Texas Credit Service Organization Surety Bond?
In the state of Texas, anyone who does business as a credit service organization (CSO) must register with the Texas Secretary of State. Per the Texas Finance Code, a credit service organization is anyone who sells, provides or performs any of the following services in exchange for payment:
- Improving buyers credit record, history or rating
- Obtain an extension of credit for a buyer
- Provide advice or assistance in regards to either of the above items
Security in the form of a surety bond is a requirement for registration. The bond amount is $10,000 and each location of the CSO requires a separate bond.
How does a Texas Credit Service Organization Surety Bond work?
Texas Credit Service Organization Surety Bonds guarantee that the CSO complies with the Texas Finance Code Title 5 Chapter 393 Subchapter A and protects any person who is damaged by the unlawful actions of the CSO. If the CSO does not comply with the terms of the bond, a claim can be filed with the surety company. If the claim is valid, the surety will pay up to the penal sum of the bond to resolve the claim. The CSO is then required to reimburse the surety for all monies paid out, including any attorney fees incurred by the surety.
What are the terms of the bond?
Texas Credit Service Organization Surety Bonds are filed with the Texas Secretary of State and renew on an annual basis. The bond is continuous and remains in full force and effect until canceled. It must be maintained by the CSO until 2 years after the date on which the CSO ceases operation. The bond can be canceled by the surety at anytime by giving 60-days written notice, prior to the effective cancelation date, to the obligee. The aggregate liability of the surety will not exceed the penal sum of the bond in any event.
How do I get a Texas Credit Service Organization Surety Bond?
The first step is to complete our quick online application for your free bond quote. Submission takes only five minutes, and our underwriting staff will be in contact with you within a couple of hours with pricing.
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.
How much does a Texas Credit Service Organization Surety Bond cost?
Texas Credit Service Organization Surety Bonds are subject to underwriting and the price you will pay depends on a review of your personal credit report. Pacific Surety is proud to offer a variety of approvals, regardless of credit, with rates starting at $100 annually for well-qualified applicants. It typically takes just a few hours from quote to issuance of the bond, and we have the ability to beat any competitors pricing. If you have any specific questions, feel free to contact our knowledgeable underwriting staff.
- Texas Secretary of State – Credit Services Organizations Page
- Texas Secretary of State – FAQ for Credit Services Organizations
- Texas Finance Code – Title 5, Chapter 393, Subchapter A
- Texas Credit Services Organization Surety Bond Form
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Credit Service Organization Surety Bonds – Texas
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