Texas Credit Services Organization (CSO) Surety Bond
Texas credit repair companies and other credit services organizations that take payment before fully performing their services generally must post security for each location. Fortunately, a $10,000 Credit Services Organization surety bond meets that requirement without tying up $10,000 in cash.
$10,000
Security per location
Form 2802
Secretary of State bond form
$100 / Year
State registration fee
Chapter 393
Texas Finance Code
What Is a Credit Services Organization?
Texas law uses the term Credit Services Organization, or CSO, for certain businesses that provide credit-related services to consumers for payment.
For example, credit repair companies are the most common type of CSO. However, whether Chapter 393 applies depends on the services your business actually provides.
- Improving a consumer’s credit history or credit rating
- Helping a consumer obtain an extension of consumer credit
- Advice or assistance related to those services
Texas CSO Registration and Bond Requirements
Unless an exemption applies, a CSO must register with the Texas Secretary of State before doing business in Texas. In addition, security is generally required whenever consumers are charged or pay in advance.
Annual Registration
Registration on Form 2801 costs $100 and lasts one year. Moreover, it can be renewed each year for the same fee.
Online Filing Only
The Secretary of State no longer accepts paper Forms 2801, 2802 or 2803. Instead, you upload your security documents online.
Advance Payment Triggers Security
If consumers pay before you’ve completely performed the agreed services, you need a bond or surety account for each location.
Texas Requires $10,000 of Security Per Location
$10,000
The Texas CSO surety bond amount is $10,000, in favor of the State of Texas. Keep in mind, however, that this is the bond limit, not the price you pay.
Multiple Locations
Each CSO location needs its own $10,000 security. Additionally, the Secretary of State issues a certificate for each added location for a $15 fee.
What Does the CSO Bond Protect?
The bond is issued in favor of the State of Texas for the benefit of anyone damaged by the CSO’s violation of Finance Code Chapter 393. As a result, an injured consumer may bring an action on the bond, up to the $10,000 bond amount.
In other words, the bond protects consumers; it isn’t liability insurance for your business. If the surety pays a valid claim, you’re generally required to repay it.
Under Texas Form 2802, the bond must be maintained until two years after the CSO stops operating. Furthermore, the bond is continuous, and the surety must give the Secretary of State at least 60 days’ written notice before cancelling it.
CSO Surety Bond or Surety Account?
| Feature | $10,000 Surety Bond | $10,000 Surety Account |
|---|---|---|
| Secretary of State form | Form 2802 | Form 2803 (Surety Account Notice) |
| What you pay up front | A premium, a fraction of $10,000 | The full $10,000 per location |
| Cash tied up | None beyond the premium | $10,000 per location |
| Who backs it | An authorized surety company | Your own funds |
Chapter 393 allows advance fees in some cases when you have the required security. Nevertheless, the Secretary of State warns that for many CSOs, advance fees could violate the FTC’s Telemarketing Sales Rule. Therefore, review all applicable state and federal laws before charging an advance fee.
How to Get a Texas CSO Surety Bond
Confirm Your Requirement
First, confirm your business falls under Chapter 393 and that the $10,000 security requirement applies.
Apply for the Bond
Next, open our bond portal and select the Credit Services Organization bond.
Review the Bond
Then make sure the business name and location match your Secretary of State registration.
File Online
Finally, complete your online CSO registration and upload the bond as the Secretary of State requires.
Texas Credit Services Organization Bond FAQs
How much is the Texas Credit Services Organization bond?
The required bond amount is $10,000 for each location subject to the security requirement.
Does every Credit Services Organization need a bond?
Not necessarily. According to the Texas Secretary of State, security is generally required when consumers are charged or pay in advance. Alternatively, a CSO may use a qualifying surety account instead of a bond.
Does a credit repair company count as a CSO?
Credit repair companies are the most common type of CSO. However, whether Chapter 393 applies depends on the services and circumstances of the particular business.
Do I need a separate bond for every location?
Yes. Each location subject to the security requirement needs its own $10,000 security. In addition, the Secretary of State charges $15 for a certificate for each added location.
How much does Texas CSO registration cost?
The Secretary of State charges $100 for an original or renewal registration. Each registration lasts one year.
What is Texas Form 2802?
Form 2802 is the Texas Secretary of State Credit Services Organization Surety Bond form. Meanwhile, Form 2801 is the registration and Form 2803 is the surety account notice.
Can I use a bank account instead of buying a bond?
Yes. Texas allows a qualifying surety account, filed on Form 2803. However, it ties up the full $10,000 per location, whereas a bond only costs a premium.
How long does the CSO bond have to stay in effect?
Under Texas Form 2802, the bond must be maintained until two years after the CSO stops operating.
Does buying a bond allow me to charge advance fees?
Not necessarily. Although Texas ties the security requirement to advance payments, the Secretary of State warns that advance fees could violate the FTC’s Telemarketing Sales Rule for many CSOs.
How much does the $10,000 bond cost?
The $10,000 is the bond limit, not the premium. Instead, the surety sets your premium based on its underwriting.
Where do I file my CSO registration?
Texas requires CSO registrations to be filed online with the Secretary of State. Paper submissions are no longer accepted.
Official Resources & Coverage for Your CSO
Ultimately, the Secretary of State administers CSO registration and security filings. Therefore, if you’re unsure whether Chapter 393 applies, verify before you buy a bond.
Texas CSO Information
Registration details from the Secretary of State.
Texas SOS CSO Page →Texas CSO FAQs
Official answers on security, forms and advance fees.
Texas SOS CSO FAQs →Professional Liability
E&O coverage for claims that your advice or services caused a loss.
Professional Liability →Cyber Insurance
Protection when you store consumers’ credit and personal data.
Cyber Insurance →Need another license bond? See all Texas license & compliance bonds.
Ready to Apply for Your $10,000 CSO Bond?
Confirm the requirement applies to your business and location, then open our bond portal to start your application.
Bond approval and premium are subject to surety underwriting. Registration and security requirements are set by Texas law and the Texas Secretary of State. This page is general information, not legal advice.