Overview of Michigan Collection Agency Bond Requirements

If you apply for a collection agency license in Michigan you will need to submit a $5,000 collection agency bond to the Bureau of Professional Licensing, along with your license application. When you renew your license in subsequent years, the bond amount may vary, and be as high as $50,000.

This bond’s purpose is to guarantee that licensees will comply with 299-1980-9 of the Michigan Occupational Code which guides the business of debt collection in the state. In particular, the bond guarantees that collectors will report and pay to their clients any collections they make on their behalf.

Collectors who violate the above requirements of their bond agreements may face claims against their bond against clients who suffer losses or damages due to such violation. When claims are made against a bond, the surety that backs the bond has to investigate the issue and extend compensation to claimants. In some cases, where losses are high, such compensation can be as high as the full amount of the bond.

If you are new to surety bonds, see our ‘What is a surety bond’ guide to for a detailed explanation about how bonds work!

Start your surety bond application today! Why us?
  • Quick turnaround - just 1-2 business days
  • Tailor-made advice on building a strong application
  • Exclusive bad credit programs

Want to know more about getting bonded in Michigan? Give us a call at (866)-450-3412!

Michigan Collection Agency Bond Cost

The cost of your bond is determined by the surety when you apply. The cost, or bond rate, is equal to a small percentage of the total amount of the bond you need to get. The surety determines the exact rate based on your personal credit score. Sometimes, sureties may also consider applicants’ financial statements or their assets and liquidity, though credit score remains most important.

If you have a credit score of FICO 700 or more, you may expect to get the lowest possible rate on your bond. In the case of the Michigan collection agency bond, you can expect to get bonded for as little as $100.Get an estimate of your bond rate through our bond calculator or the table below.

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Bond Cost Based on Credit Score
Surety bond amount Above 700 Between 650-699 Between 600-649 Below 599
Michigan Collection Agency Bond $5,000 $100 $100-$125 $125-$250 $250-$500

Bad Credit Bond Program

Do you have a low credit score? You can still get bonded with us!

Because credit score is such an important bond cost factor, applicants with lower scores are sometimes turned down by sureties. Thanks to our Bad Credit Program and our expert surety partners, you can easily get bonded with us, even if you have a low score!

Rates under this program are higher than for applicants with higher scores but your bond cost can change over time, as you improve your credit score.

See the program page to learn more about getting bonded with bad credit, and to request a quote on your bond!

Claims Against Your Bond

299-1980-9 of the Michigan Occupational Code states that collection agencies in the state must obtain a surety bond in the amount of $5,000, when getting licensed initially. A bond in the amount of up to $50,000 may be required when renewing your license in subsequent years, which is determined by the Department of Licensing and Regulatory Affairs.

The bond is conditioned on the faithful performance of collectors’ obligations with regards to their clients. It requires collectors to report and remit any collections they make on behalf of their clients. It is also intended to protect any persons from wrongful taking of money by a collection agency.

If either of these conditions is violated by a collection agency, wronged persons can file a claim against the agency’s bond to request compensation for damages. In such an instance, the surety needs to investigate the issue, determine the validity of the claim, and extend compensation to claimants to cover for their losses. Compensation can be as much as the full amount of the bond.

Ultimately, though, it is the bonded agency that is liable for claims against their bond so any claims covered by the surety must be repaid to it in full.

Apply for Your Bond Here!

Get a free quote on your Michigan collection agency bond by completing our bond form! We’ll contact you with your quote along with details about completing the bond application process.

Once you finalize your application, it will take up to two working days for your bond to be issued. We’ll then mail it to you by post and send you a digital copy as well.

Start your surety bond application today! Why us?
  • The lowest possible rates
  • A 100% money-back guarantee
  • Access to specialty programs, not available to small agencies

Find out more about the bonding requirements in the state by calling us at (866)-450-3412 anytime!


About the author:
Todd Bryant
Todd Bryant is a graduate of Germantown Academy and the University of Pittsburgh College of Business Administration Honors College. He has been President of Bryant Surety Bonds, Inc., an A+ rated Business with the Better Business Bureau, since 2007. Licensed as a producer with the Department of Insurance, he has been published in the National Association of Surety Bond Producers newsletter and on numerous authoritative publications such as The Washington Post, Entrepreneur.com, Azcentral.com and many more.