At some point in the process of starting a credit repair business, you’re going to discover that in some states you must have a surety bond. The real term for it is credit services organization bond. In this article, we are going to share everything you need to know about a credit repair surety bond and give you the resources to learn whether you need one or not.

Learn How You Can Do Business in All 50 States Without a Surety Bond

Note that below this information about credit repair surety bonds I will share with you how you can start a credit repair business and do business in all 50 states and U.S. territories without any surety bond.

What is the Purpose of a Credit Repair Surety Bond?

As you may be aware, you do not need any licensing or accreditation to be in the credit repair business. This made our industry in the past ripe for unscrupulous people that would advertise a credit repair service, sell that service to consumers, never provide the service, and pocket the money.

We started our credit repair business in 2012 and there were still many reports of this type of criminal behavior occurring. Since then, state governments have stepped in and largely cleaned up our industry. One of the tools they use to do so is a surety bond.

A surety bond is like an insurance policy. In the very specific case of a credit repair surety bond, it ensures that if the credit repair company does not provide the services after taking a client’s money, the company that issued the bond will pay the client back.

Do You Need a Surety Bond?

The question then is do you need one? Some states require all credit repair organizations to have a surety bond according to the Federal Credit Repair Organizations Act (CROA). In other words, they follow federal law. So, if a company or individual is providing credit repair services and taking money from a consumer for these services, they must have a surety bond. The exceptions are if this company or individual is a bank, credit union, attorney, or 501(c)3 non-profit organization.

Other states only require you to have a surety bond if fees are charged before the services are delivered. In other words, if a credit repair company or individual providing credit repair services provides those services and only gets paid after services are completed, they do not need to purchase a surety bond.

From the research I’ve done on surety bonds, this part of some state laws is a grey area. And it may differ from state to state. In some cases, you may charge a nominal account setup fee. The question then is can you charge a monthly fee in arrears for the part of the service you provided the previous month.

Therefore, You Need to Check with Your State to Understand Their Stance on Charging Fees

So, check with your state on the requirements of having a surety bond. If they don’t require every credit repair company or organization to have one, do they require it if you are charging fees in advance of providing service? And, what specifically does that mean?

If after checking with your state, there is any question in your mind as to whether you should have a surety bond, then get one. It is far better to be safe than sorry.

How Much Does a Surety Bond Cost?

According to, “…the cost will depend primarily on the owner’s personal credit and the financial strength of the business. Applicants with strong credit typically will pay between 1 to 3% of the bond amount in the form of an annual premium. Those with damaged credit may have to pay higher rates, in the range of 4 to 15%.”

Following along with this information, the State of California requires a $100,000 surety bond. Those with strong credit will pay between $1,000 and $3,000 per year for that bond. And, of course, it will be more for those with less than strong credit. In Texas, the bond requirement is $10,000. The cost would be between $100 and $300 annually for those with strong credit.

Surety Bonds in Your State

The best resource I’ve found to learn if your state requires a credit services organization bond and the amount of that bond is Go to this page to see a list of states and a brief explanation of the bond requirements for that state. As well, you can submit online for a free quote.

The Opportunity to be in the Credit Repair Business Without a Surety Bond

We started a credit repair agency in 2012. We have the ability to do business in all 50 states. The total startup costs were less than $300. This is a business model whereby you are an Independent Agency owner representing a national company that is a 501(c)3 non-profit. Therefore, not only do you not need a surety bond, but you can do business anywhere in the country.

Not needing a surety bond is not the biggest benefit to this business model. No credit repair software is required because the company drafts dispute letters. You’ll not need merchant services, a way to pull credit, or need to build a website. They provide customer service for your clients 8 hours a day, 5 days a week. Therefore, you don’t have to spend weeks and months setting up your business. It’s already set up for you from day one.

But perhaps the biggest advantage to this business model is that they have several other credit-enhancing and financial services that you can offer your client other than just credit repair. This makes you far more competitive with all the other credit repair companies out there. You’ll be able to provide the fastest, most effective, and most affordable credit repair and credit-related services in the country. And you can do it anywhere in the United States!

Learn More About the Credit Agency Business Model

To learn more about this business model visit Credit Repair Business Opportunity to read about it, watch a detailed overview video, and set an appointment to talk with one of the top Independent Agents in the country. You can ask your questions of someone that is in the trenches building their independent agency every day.