Collection Agency License: Step-by-Step Guide

If you want to legally operate a collection agency to collect claims owed to a third party, many states throughout the country will require you to obtain a collection agency license.
Depending on your state and how you plan on operating your business, the requirements you must meet will vary. In some states, licensing is handled at the state level, while other states allow you to register via the NMLS (National Mortgage Licensing System).
You can get a general idea of the steps you'll need to take to get your license in the majority of states by reading our guide below.
If you need to determine your state's exact licensing requirements, take a look at our comprehensive guide further down which offers state specific guides for obtaining your license.

Collection Agency License Step-By-Step Guide

Step #1: Determine Your State's Requirements
As mentioned above, you will have to meet unique requirements depending on your business type and state. You have two options when it comes to determining the exact collection agency license requirements you need to meet:

  • Option #1: Research your state's requirements on your own, and determine the licensing requirements you must meet. This method is often time consuming, as confirming the requirements via government websites isn't particularly easy.

  • Option #2: As an alternative to researching your state's requirements on your own, you can find out the exact requirements to obtain your license by selecting your state below.

Step #2: Meet All Necessary Requirements
Once you have determined the requirements for your state, you need to take the proper steps to meet them. Some of the most common requirements you'll have to meet include:
  • Obtaining/submitting a certificate of authority
  • Submitting a business plan
  • Providing financial statements
  • Paying your license fee
As stated above, the requirements you must meet will vary depending on your state, and how you plan on operating your business. Select your state below to find the exact requirements you must meet to obtain your collection agency license.
Step #3: Obtain Your Collection Agency Bond
This is one requirement that many states have in place, and you'll likely need your bond in order to submit your license application. A collection agency bond protects your clients by ensuring you'll follow the regulations of your state whole operating your agency. You'll want to ensure you get your surety bond from a collection agency bond expert to avoid any delays or future headaches.
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Step #4: Submit Your Collection Agency Application
Your state/the NMLS will provide you the necessary applications and paperwork that you'll need to fill out. Simply complete the application, and send it to the proper department with your surety bond. Be sure to double check all of your information before submitting it, as errors will likely increase turnaround time for your licensing approval.
Step #5: Receive Your Collection Agency License
Once you submit all the required information, your state/the NMLS will review your application, and if approved, will send your license directly to you. This process may take a few weeks depending on your state’s requirements and their complexities.

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