Utah Credit Services Organization Bonds Explained
If you want to operate as a credit services organization in Utah, you have to register with state authorities. This process entails providing a credit services organization bond.
The purpose of the bonding requirement is to secure your legal compliance. It works as a safety mechanism that protects your customers.
The bond represents a contract between three entities, with your business being the principal. The Utah Department of Commerce is the obligee that sets the registration criteria for credit services organizations. The third party is the surety, which is the bond provider.
Questions about Credit Services Organization Bonds in Utah
In which cases do I have to post this bond?
In order to obtain a Utah credit services organization registration from the Division of Consumer Protection at the state Department of Commerce, you need to post a $100,000 surety bond. Your bond ensures you will adhere to the Utah Credit Services Organizations Act, as well as all other relevant rules.
How much do I have to pay to get bonded?
The bond amount that you have to provide for your credit services organization registration is $100,000. In order to get bonded, you have to pay a small fraction of it, which is referred to as the bond premium.
The surety that you apply with needs to consider your personal and business finances to formulate your exact surety bond cost. The typical factors that affect it include your personal credit score, company finances, and fixed and liquid assets. This is how the surety assesses the bonding risk that you pose. If your overall profile is stable, you can expect bonding rates in the range of 0.75% and 5%.
|Utah Credit Services Organization Bond Cost Based on Credit Score|
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Credit services organization bond||$100,000||$750-$1,500||$1,000-$2,500||$2,500-$5,000||$5,000-$10,000|
Is bad credit bonding possible?
Lance Surety Bonds operates its Bad Credit Surety Bonds program for applicants with financial issues. If you are struggling with a low credit score, tax liens, bankruptcies, and civil judgments, you can get bonded through this program.
As the bonding risk is higher, the rates you can expect are between 5% and 10%. Nevertheless, you are guaranteed a top bonding option with us, as we work with a number of A-rated, T-listed surety companies.
How do I get bonded?
The first step to obtain your surety bond is to fill out our online application form (it takes 5min). You have to attach a full set of documents, so that we can assess your exact quote. Then, you can purchase your bond online. We will deliver a digital and a paper version of your bond afterwards.
Would you like to learn more about the way bonding works? You can delve into our detailed How to Get Bonded page.
Our bonding experts are here to assist you. You can reach us at (877) 514-5146.
How are bond claims handled for credit services organizations?
Unlike insurance, your surety bond does not protect your business. Instead, it safeguards the interests of your customers. Thus, if you fail to follow the Utah Credit Services Organizations Act and the rest of the applicable laws, you can receive a bond claim against your company.
This is how a harmed party can seek reimbursement for up to the bond amount of $100,000. If the case is proven, you will need to pay all costs. The surety that bonded you may step in at first, but you are fully liable to repay it afterwards. Staying away from claims is your best bet, as they are harmful and costly for your business.