Louisiana Credit Repair Service Bond: A Comprehensive Guide
May 19, 2021
This guide provides information for insurance agents to help credit repair companies obtain Louisiana Credit Repair Service Bonds
At a Glance:
- Average Cost: Between $1,000 to $12,500 per year based on the applicant’s credit
- Bond Amount: $100,000
- Who Needs it: All credit repair companies operating in Louisiana
- Purpose: To ensure the public will receive compensation for any damages should the credit repair company fail to comply with the bond provisions
- Who Regulates Credit Repair Companies in Louisiana: The Louisiana Attorney General
Louisiana statute 9:3573.1 requires all credit repair companies operating in the state to register with the Attorney General. The Louisiana legislature enacted the registration laws and regulations to ensure that credit repair companies engage in ethical business practices. In order to provide financial security for the enforcement of the registration law, credit repair companies must purchase and maintain a $100,000 surety bond to be eligible for registration.
What is the Purpose of the Louisiana Credit Repair Service Bond?
Louisiana requires credit repair companies to purchase a surety bond as part of the application process to register with the Attorney General. The bond ensures that the public will receive compensation for financial harm if the credit repair company fails to comply with the regulations set forth in Louisiana statute 9:3573.3. Specifically, the bond protects the public in the event the credit repair company engages in any acts of fraud or misrepresentation. In short, the bond is a type of insurance that protects the public if the credit repair company breaks registration laws.
How Can an Insurance Agent Obtain a Louisiana Credit Repair Service Surety Bond?
BondExchange makes obtaining a Louisiana Credit Repair Service Bond easy. Simply login to your account and use our keyword search to find the “credit” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
Is a Credit Check Required for the Louisiana Credit Repair Service Bond?
Surety companies will run a credit check on the owners of the credit repair company to determine eligibility and pricing for the Louisiana Credit Repair Service Bond. Owner’s with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the Louisiana Credit Repair Service Bond Cost?
The Louisiana Credit Repair Service surety bond can cost anywhere between $1,000 to $12,500 per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $100,000 bond requirement.
$50,000 Mortgage Broker Bond Cost
|Credit Score||Bond Cost (1 year)|
|680 – 719||$1,500|
|650 – 679||$2,000|
|600 – 649||$4,000|
|550 – 599||$7,500|
|500 – 549||$12,500|
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
How Does Louisiana Define “Credit Repair Service Company?”
Indiana statute 9:3573.2 defines a credit service organization as any individual or business entity that performs one or both of the following services:
- Improves a buyer’s credit record, history, or rating
- Advices or assists a buyer with regard to improving their credit record, history, or rating, including the sale of a self-help instructional guide
How Do Credit Repair Companies Apply for Registration in Louisiana?
Credit repair companies must mail their complete registration statement to the following address:
Louisiana Attorney General
1885 N 3rd St
Baton Rouge, LA 70802
Do Louisiana Credit Repair Companies Need to Renew Their Registration?
No, credit repair companies in Louisiana do not need to renew their registration statement. The registration will remain in effect unless revoked by the Attorney General or the credit repair company ceases business activities.
What Are the Insurance Requirements for the Louisiana Credit Repair Service Registration?
The State of Louisiana does not require credit repair companies to obtain any form of liability insurance as a prerequisite to obtaining a business registration. Credit repair companies must purchase and maintain a $100,000 surety bond.
How Do Louisiana Credit Repair Companies File Their Bond?
Credit repair companies should mail the completed bond form, including the power of attorney, to the following address:
Louisiana Attorney General
1885 N 3rd St
Baton Rouge, LA 70802
The Credit Repair Service surety bond requires signatures from both the surety company that issues the bond and a representative from the credit repair company. The surety company should include the following information on the bond form:
- Legal name and address of entity/individual(s) buying the bond
- Surety company’s name, address and phone number
- Date the bond is signed
What Can Louisiana Credit Repair Companies Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, credit repair companies in Louisiana must follow all registration regulations in the state, including some of the most important issues below that tend to cause claims:
- Do not make false or misleading statements when advertising your services
- Do not engage in any acts of fraud
- Do not advise buyers to make false or misleading statements in regards to their credit
What Other Insurance Products Can Agents Offer Credit Repair Companies in Louisiana?
Louisiana does not require credit repair companies to purchase any form of liability insurance as a prerequisite to obtaining a license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Louisiana Credit Repair Company Customers?
Louisiana conveniently provides a public list of all active credit repair companies in the state. The list can be accessed here (scroll to the bottom of the page to find the link). Contact BondExchange for addtional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.