Poor or Lack of Credit
Typically with derogatory marks on your credit report like a bankruptcy and tax liens or judgments etc. you can expect a rate ranging from 3-10% depending on what else is listed on the report, bond amount and bond type. If you have a combination of the above you can expect a rate ranging from 5-15% of the bond limit.
Factors that can have a negative impact on the credit score include:
In the last year the surety bond industry has had some major increase in bond amount requirements. Bonding risk typically doesn’t change often but can happen when flurries of claims come in on one specific type of bond. This means the surety companies are paying claims out more often on these types of license’s due to unfair business practices of others with this license type.
As bond amounts are increasing you can expect to be paying more for surety bonding. Premiums will go up and underwriting guidelines will be stricter due to the higher bond limits. The impact of higher bonding limits is far reaching for small business owners with poor or lack of personal credit.
What Can I do?
Not all surety bonds are based off of personal credit. It is dependent on the state and type of bond you are requesting. Surety1 has access to many secondary surety markets so we can get you the best quote possible. Secondary rates generally range from 5-24% of the bond amount.
Surety1 recognizes that life shows up, and not everyone has stellar credit. We encourage everyone to apply regardless of what is listed on their report and we will try our best to get you the lowest rate possible.