Who Can Operate a Credit Services Organization (CSO) in Texas Without Secretary of State Registration?

Operating an unregistered CSO is a violation of Chapter 393, Finance Code, and may also be a criminal offense.

Frequently Asked Questions for Credit Services Organizations

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In Texas, credit service organizations are governed by Chapter 393 of the Finance Code and the secretary of state’s administrative rules found in 1 Texas Administrative Code Chapter 74, as well as any other applicable state or federal law.

What is a credit services organization (“CSO”)?

A person who provides, or represents that the person can or will provide, for the payment of valuable consideration any of the following services with respect to the extension of consumer credit by others:

improving a consumer’s credit history or rating;
obtaining an extension of consumer credit for a consumer;  or
providing advice or assistance to a consumer with regard to Paragraph (A) or (B).
Tex. Fin. Code § 393.001(3).

CSOs are often identified as credit repair companies.

FAQs for Credit Services Organizations

Are CSOs required to register with the secretary of state?

Yes, § 393.101, Finance Code, provides that before conducting business in Texas, a CSO must register with the secretary of state.

See Form 2801.

A registration must be accompanied by proof of security or a statement explaining why proof of security is not required and the registration fee.  Each registration is effective for one year and may be renewed.

The following persons, however, are exempt from Chapter 393, Finance Code, and are not required to register with the secretary of state:

a person: authorized to make a loan or grant an extension of consumer credit under the laws of this state or the United States;  and
subject to regulation and supervision by this state or the United States;

a lender approved by the United States secretary of housing and urban development for participation in a mortgage insurance program under the National Housing Act (12 U.S.C. Section 1701 et seq.);

a bank or savings association the deposits or accounts of which are eligible to be insured by the Federal Deposit Insurance Corporation or a subsidiary of the bank or association;

a credit union doing business n this state;

a nonprofit organization exempt from taxation under Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C. Section 501(c)(3));

a real estate broker or salesperson licensed under Chapter 1101, Occupations Code, who is acting within the course and scope of that license;

an individual licensed to practice law in this state who is acting within the course and scope of the individual’s practice as an attorney;

a broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission acting within the course and scope of that regulation;

a consumer reporting agency;

a person whose primary business is making loans secured by liens on real property;

a mortgage broker or loan officer licensed under Chapter 156, Finance Code, who is acting within the course and scope of that license;


an electronic return originator who: is an authorized Internal Revenue Service e-file provider; and makes, negotiates, arranges for, or transacts a loan that is based on a person’s federal income tax refund on behalf of a bank, savings bank, savings and loan association, or credit union.

Tex. Fin. Code § 393.002.

What is the cost of obtaining a CSO certificate of registration from the secretary of state?

The fee for an original certificate of registration or renewal is $100. In addition, a CSO must accompany an application for certificate of registration with proof of security or a statement explaining why proof of security is not required.

When is a security deposit required?

Generally, a security deposit is required when consumers will be charged or pay in advance.

According to § 393.302, Finance Code, “a credit services organization or a representative of the organization may charge or receive from a consumer valuable consideration before completely performing all the services the organization has agreed to perform for the consumer only if the organization has obtained a surety bond for each of its locations or established and maintained a surety account for each of its locations in accordance with Subchapter E.”

How much security must I provide?

$10,000.00 for each location. Tex. Fin. Code §§ 393.302, 393.403.

The security deposit must be in favor of the State of Texas for the benefit of any person damaged by any violation of Chapter 393, Finance Code.

What types of security are acceptable?

A CSO may satisfy the security requirement by obtaining a surety bond or establishing a surety account in favor of the secretary of state.See Forms 2802, 2803.

How much does it cost to obtain a bond?

The surety bonding company determines the cost of a surety bond. Contact the surety company to obtain the cost of the bond.

What if the CSO has multiple locations?

Additional locations may be added to the CSO’s registration statement, but each location must have its own security.  Tex. Fin. Code. § 393.302.  Although multiple certificates of registration are not required, for a $15 fee, the secretary of state will issue a certificate of registration for a particular additional location.

FAQs for Credit Services Organization Consumers

May a CSO charge fees in advance of rendering the service?

Chapter 393, Texas Finance Code permits charging of fees in advance only if the CSO has obtained a surety bond or maintains a surety account for each of its locations and a copy of the bond or information relating to the account is on file with the secretary of state. Tex. Fin. Code § 393.302.

However, for many CSOs, charging advance fees could be a violation of the FTC’s Telemarketing Sales Rule, which was amended in October 2010 to apply to a wider range of businesses and to prohibit advance fees.

In addition to complying with Chapter 393, a CSO considering whether to charge fees in advance should review the Telemarketing Sales Rule as well as other applicable federal or state law.  FTC Guide for Complying with the Telemarketing Sales Rule.

What are the requirements for a CSO’s contract with a consumer?

Each contract for the purchase of CSO services by a consumer must be in writing, dated, and signed by the consumer.  Tex. Fin. Code § 393.201.

The contract must contain the payment terms, a description of the services the CSO is to perform, an estimated period for performing the services, the address of the CSO’s principal place of business, and the name and address of the CSO’s registered agent. Id.

The written contract must also notify consumers of their right to cancel within three days after signing the contract.  Tex. Fin. Code § 393.202.

May a consumer waive any of the provisions of Chapter 393, Finance Code?

No.  A waiver of any provision of Chapter 393 is void.  Tex. Fin. Code § 393.003.

May a CSO provide payday loans?

Some CSOs offer payday loans as part of their services under Chapter 393, Finance Code.

As CSOs, the services of the CSO are subject to Chapter 393 but apparently are not subject to the small-loan laws and regulations by the Consumer Credit Commissioner according to the Fifth Circuit Court of Appeals decision in Lovick v. Ritemoney Ltd, No. 03-20917 (5th Cir. July 14, 2004).

How do I determine whether a CSO is registered?

The names of CSOs that have registered with the secretary of state may be searched using our Credit Service Organization Search.

What if the CSO is not registered or engages in fraudulent or deceptive practices?

Chapter 393, Finance Code, provides for both civil remedies and criminal penalties.  Tex. Fin. Code §§ 393.501–.503.

A consumer may take private legal action against a CSO for failing to comply with its contractual obligations.

In addition, a consumer may file a complaint with the attorney general if the consumer feels that the CSO has violated Chapter 393, Finance Code, by engaging in a false, misleading, or deceptive act or practice.

Operating an unregistered CSO is a violation of Chapter 393, Finance Code, and may also be a criminal offense.

The attorney general or a district or county attorney may investigate an alleged violation of the Act.   If you notify the secretary of state, this office will notify the CSO of the registration requirement and, if necessary, refer the matter to the attorney general for investigation.

Please report the names of any CSOs that are not registered to:

Registrations Unit
Statutory Documents Section
Office of the Secretary of State
P. O. Box 13550
Austin, Texas 78711-3550
(512) 475-0775

The secretary of state is a filing officer for CSO registrations and security and does not have authority to regulate the business practices of a CSO.  The secretary of state cannot resolve disputes about CSO services, investigate the business practices of a CSO, or determine whether a consumer is entitled to a refund.

You may also report any problems that you have with a CSO to the Federal Trade Commission. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them.

Complaints with the FTC may be filed online or by calling 1-877-382-4357.

Consumers may also wish to file a complaint with the Better Business Bureau.

My question wasn’t answered here.  Who do I call?

For additional information please call (512) 475-0775.

There is a difference between a credit services organization and a debt management organization.

While both entities may deal with financial matters, their specific roles and functions vary.

Credit Services Organization (CSO):

A Credit Services Organization, also known as a Credit Repair Company, is a business that offers services to assist individuals in improving their creditworthiness.

These organizations typically work on behalf of individuals to help them manage their credit reports, dispute inaccurate information, negotiate with creditors, and provide guidance on credit improvement strategies.

Their primary focus is on repairing and improving credit profiles.

Debt Management Organization (DMO):

A Debt Management Organization, also referred to as a Debt Management Company or a Debt Relief Agency, specializes in assisting individuals who are facing financial difficulties and struggling with debt.

These organizations work with individuals to develop debt management plans, negotiate with creditors to reduce interest rates or monthly payments, and provide financial counseling to help individuals regain control over their finances.

The main objective of a DMO is to provide debt relief solutions and help individuals repay their debts in an organized and manageable way.

In summary, a credit services organization primarily focuses on improving credit profiles, while a debt management organization concentrates on helping individuals manage and reduce their debts.

TX SOS CSO (e.g. credit repair, which you’ll see federal lawsuits filed against the credit bureaus like Trans Union, Equifax etc)

Exempt: “an individual licensed to practice law in this state who is acting within the course and scope of the individual’s practice as an attorney”.

LIT focuses on why legislators did not stop at “an individual licensed to practice law in this state”, but felt the need to provide further statutory text “who is acting within the course and scope of the individual’s practice as an attorney”.

LIT believes this is answered by TX OCCC pertaining to registration requirements for Debt Management and Settlement “providers”.

Providers definition:

“Provider” means a person that acts as an intermediary between a consumer and one or more creditors and that provides or offers to provide a debt management service to a consumer in this state.

Sec. 394.203. APPLICABILITY. (a) Except as otherwise provided by this subchapter, this subchapter applies to a provider regardless of whether the provider charges a fee or receives consideration for a service.

(b) The business of providing debt management services is conducted in this state if the debt management services provider solicits or contracts with consumers located in this state.

(c) This subchapter does not apply to:

(1) an attorney licensed to practice in this state, unless the attorney holds the attorney’s self out to the public as a provider or is employed, affiliated with, or otherwise working on behalf of a provider;

(2) a title insurance or abstract company employee or agent, or other person legally authorized to engage in escrow business in the state, only while engaged in the escrow business;

(3) a judicial officer or person acting under a court order;

(4) a person who has legal authority under federal or state law to act as a representative payee for a consumer, only to the extent the person is paying bills or other debts on behalf of that consumer;

(5) a person who pays bills or other debts owed by a consumer and on behalf of a consumer, if the money used to make the payments belongs exclusively to the consumer and the person does not initiate any contact with individual creditors of the consumer to compromise a debt, arrange a new payment schedule, or otherwise change the terms of the debt; or

(6) a financial institution, as defined by Section 201.101.

(d) The following are not debt management services for purposes of this subchapter:

(1) an extension of credit, including consolidation or refinance of a loan; and

(2) bankruptcy services provided by an attorney licensed to practice in this state.

(e) This subchapter applies to a person who seeks to evade its applicability by any device, subterfuge, or pretense.

Added by Acts 2005, 79th Leg., Ch. 336 (S.B. 1112), Sec. 1, eff. September 1, 2005.

LIT’s interpretation is that if the attorney or law firm’s practice focuses on debt management and settlement services, they are deemed a “provider” per statute and hence they are required to register and hold a bond and this should logically carry over to the CSO requirement too, otherwise the additional text added in the CSO legislation would not have been necessary at all.

LIT Cases Studies

Let’s take a look at some example case studies we’ve selected and apply the laws to each of these ‘providers’ to see if they are violating Texas law or not.



LIT performed a google search for “credit repair” allowing our search to be targeting locally, e.g. Harris County and Sarah Ford’s business, 713 Tax and Credit Repair LLC popped up.

First, the keyword rich company name and matching vanity domain identifies that there should be two checks, first to check the database of Authorized IRS e-file Providers (zip-code search), which returned 17 results, but none of which included Sarah Ford, either in her personal capacity or business entity name.

Second, LIT performed a search at TX SOS (CSO). The results netted no registration or active surety bond.

This business is operating unlawfully in the State of Texas and in violation of Texas Laws.

713 TAX AND CREDIT REPAIR LLC is a Texas Domestic Limited-Liability Company (Llc) filed on May 20, 2021. The company’s filing status is listed as In Existence and its File Number is 0804076489.

The Registered Agent on file for this company is Sarah Ford and is located at 5350 Aeropark Dr Apt 102, Houston, TX 77032. The company’s principal address is 5350 Aeropark Dr Apt 102, Houston, TX 77032-4215.

The company has 1 contact on record. The contact is Sarah Alexis Ford from Houston TX.

Robert Pfister dba

Registered as a CSO.

Daphne Turner of DTB Credit Solutions

Registered as a CSO – but now Expired (Sep. 2022)

Fresh Start Credit, Inc.

Not Registered as a CSO.

Fresh Start Credit, Inc. filed as a Domestic For-Profit Corporation in the State of Texas on Tuesday, January 19, 2016 and is approximately seven years old, as recorded in documents filed with Texas Secretary of State.



Not Registered as a CSO.

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Planning Credit Builders LLC


Not Registered as a CSO.

PLANNING CREDIT BUILDERS LLC is an Active company incorporated on December 18, 2020 with the registered number L20000396287.

This Florida Limited Liability company is located at 100 S. ASHLEY DRIVE, TAMPA, FL, 33602, US and has been running for three years.

There are currently three active principals.

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Who Can Operate a Credit Services Organization (CSO) in Texas Without Secretary of State Registration?
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