Bad Credit Surety Bonds
- Surety Bonds if applicant has bad credit
- Need a Surety Bond but have bad credit
- Surety bonds for Bad Credit
How to get a Surety Bond with Bad Credit
Applying for a surety bond with low credit is the same as applying for a surety bond with high credit. The only differences being the cost of the bond and the ease of placing the bond. That is why it is extremely important to partner with a surety bond agency that has decades of experience assisting customers with challenged credit and financial situations. The experts at The ProSure Group have a high level of understanding and have developed unique relationships with over 30 surety companies. That allows us to craft the best solutions for our customers while utilizing the appetite of a very broad range of carriers. This combination of expertise and strong and deep partnerships enables us to write the bonds most others can’t, at the most competitive of terms and at the lowest rates available on the marketplace.
What does a Surety Bond cost if you have Bad Credit?
First, we must define “bad credit.” Bad or low credit according to the surety industry is a FICO score that is less than 650 or so. Any score above 700 is considered good credit. However, credit scores only do not define all bad credit types. A customer may have a 720 FICO score but can still be considered to have bad credit if they have open judgments, unpaid tax liens, open or recently discharged bankruptcies, or past due child support.
Below is a typical range of credit scores and the associated premium generally charged in said ranges, assuming no open judgements, no unpaid tax liens, no bankruptcies, and no past due child support:
- 750+ (excellent credit) = 1% or less of the total bond amount
- 650-750 (good to above-average credit) = 1%-3% of the total bond amount
- 649 or lower (subprime to poor credit) = 3%-20% of the total bond amount
It is important to know that a low credit score is certainly not a deal breaker and doesn’t necessarily mean you will have a high bond rate or that you won't qualify for the bond. Our holistic approach takes into consideration the stories behind the situation, the risks associated with the bond being requested, the history of the person and the company, and the financial position of the parties involved.
Be prepared to provide additional information when your credit situation involves:
- open judgments
- unpaid tax liens
- open or recently discharged bankruptcies
- past due child support
Our experts at The ProSure Group have been very successful in providing approvals for bonds for these situations.
License Bonds and Permit Bonds with Bad Credit
Applicants should not be deterred from applying for surety bonds if they have low credit scores. License and permit bonds are often approved on a daily basis even with less-than-stellar credit. Mistakes happen, we get that, and so do sureties. So don't hesitate to apply for your license and permit bond today.
Contract Bonds and Construction Bonds for applicants with Bad Credit
Contract Bonds such as Performance Bonds, Payment Bonds, and Bid Bonds are underwritten using a much larger scope of data than License Bonds and Permit Bonds. These Contract Bond risks are evaluated based on things such as the details of the project, the history and usually the financial status and backlog of the applying company and the experience of the people involved. With this, however, a component to the underwriting is the owner's credit reports. As mentioned, just be prepared to address any issues that may show up on your credit report. Our surety experts will work with you on any issues that may arise in order to understand and help provide bonding.
Court Bonds for Bad Credit Applicants
Court Bonds can be written for customers and companies with bad credit. Our surety experts will take into consideration the bond type and the bond amount along with the underlying risk in addition to the financial backing and character of the company or person needing the bond.
Why is Credit so important when applying for Surety Bonds?
Surety companies need to have an objective assessment in order to qualify/quantify the bond risk they are undertaking. A credit report is an objective tool that helps with this assessment. Sureties many times see credit history as a reflection of how you conduct your business and their exposure to a potential bond claim. With some carriers and bond types, a credit report may be one of the more important tools used in their assessment and underwriting. With others, it may not be the same amount of weight.
Premium Financing is available for Bonds for Bad Credit applicants
Surety bond premiums can sometimes get expensive for those with lower credit scores. To help in many of those situations we have secured the ability for our customers to finance the cost of their bond when the premium is greater than $1,000. These surety bond payment plans break up the large amount of money due upfront into a down payment and several months of smaller payments until the premium is paid.