What Is a Illinois Credit Services Organization Bond?
Credit services organizations in Illinois have to register with the Secretary of State Index Department, so that they can operate legally. The process entails posting a credit services organization bond.
This Illinois surety bond, just like the rest of bonds, functions as a safety for the state and your customers. The bond can provide a compensation to any harmed parties in case you engage in fraudulent activities while acting as a credit services provider.
The surety bond works like a contract between three parties. The principal that has to obtain the bond is your business. The Index Department is the obligee which requires the bond. The surety is the bond provider.
Questions about Credit Services Organization Bonds
In which cases do I need a bond?
If you want to obtain a registration as a credit services organization, you will have to post a $100,000 to the Secretary of State Index Department. You need to complete the application form and provide the bond in the official form as well. By providing the surety bond, you guarantee your compliance with the Illinois Credit Services Organizations Act. You will have to maintain an active bond for two years after you stop your operations as a credit services provider.
What is the bond price?
The state Index Departments sets the bond amount that your organization should obtain. Is is currently $100,000. The bond premium, however, is only a portion of this amount. If your finances are stable, the bond rates are typically between 1%-3%.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Illinois credit services organization bond||$100,000||$750-$1,500||$1,000-$2,500||$2,500-$5,000||$5,000-$10,000|
Besides the bond amount you have to post, a number of other factors influence your surety bond cost. The surety that you work with will have to examine your personal credit score, business finances, and liquidity or assets that you showcase. The price you pay to get bonded will be lower if your financial and business profile is solid.
Can I get bonded with bad credit?
Even if you are struggling with low credit scores, tax liens, bankruptcies, or civil judgements, you can still get bonded with us. Lance Surety Bonds operates its Bad Credit Surety Bonds program for applicants with problematic finances.
The bond prices you can expect are often between 5% to 10%. They are there to compensate for the higher risk that bonding you posees. Since we work with numerous A-rated, T-listed surety companies, we will offer you a top bonding option that is in line with your specific circumstances.
How do I apply for my bond?
In case you want to learn more about how bonding works, make sure to go through our How to Get Bonded page. For any questions you might have, just call us at (877) 514-5146 and we will help you out.
What happens if I get a claim against the bond?
The bond you obtain for your credit services organization does not work like insurance for your business. Instead, it safeguards the interests of your customers and ensures that you follow the law. This means that if you transgress from the rules - if you fail to provide agreed services, falsify documents, or engage in any fraud or misuse, you may end up with a bond claim. An affected entity can seek a reimbursement up to the bond amount, or $100,000.
The bond claim sum has to be paid if the claim is proven. Your surety may step in at first to ensure that the claimant receives the due compensation. However, you need to cover all costs afterwards. That’s why claims are a serious financial and reputational threat for your credit services organization.