Bad Credit Surety Bond

Credit score is one of the main items that surety bond companies look at when considering bond applications. A bond applicant with good credit is deemed "low risk" and often approved. However, the reality is that many people don't have high credit or, in some cases, any credit. This may be for various reasons, including student loans, high credit card balances, medical bills, late payment history, bankruptcy, etc.

Thankfully, having bad credit doesn't necessarily mean you can't get your bond needs met, though. Here is what you need to know.

Whether you can get bonds with bad credit will depend on the bond type you need and the severity of your credit issues. You can determine if you truly have bad personal credit by reading this guide. You can also pull a soft credit report from the websites of the major credit bureaus to see your credit score.

It's also important to understand how bonds work and that you're responsible for paying bond claims. If you have credit issues, a surety company will view you as a higher risk—more likely to cause and not pay claims—which is why the term "high risk surety bonds" is sometimes used.

You can read our guide to learn how to get bonded and insured.

How to Apply for a Bad Credit Surety Bond?

You can apply for a bad credit surety bond just like you would any other bond when it comes to court bonds, license bonds, and permit bonds.

To get a free quote or an instant estimate, you will need basic information such as your name, phone number, email, and required bond amount. An instant estimate also requires you to know the type of bond you need.

Contract bonds are a little trickier and may require the SBA program if you are a small contractor with bad credit.

You will find more information on each type of surety bond below.

You will be able to get approved for most license bonds and permit bonds even with credit issues. Examples of these include motor vehicle dealer bonds and contractor license bonds. There are multiple ways to get started:

• You can apply online to get a firm quote. Or, if you're just doing research, you can use our surety bond premium calculator tool to get an instant estimate.
• Learn more about surety bond costs and how they are determined by reading our comprehensive pricing guide.
• Lastly, you can also select your state from the list below to view all of its bond requirements.

It's possible to get construction bonds for jobs such as bid bonds and performance bonds with bad credit. However, if you're a small business or independent contractor with severe credit issues, you won't be able to get bonded through standard markets—you'll need to use the SBA program. Keep in mind, you'll be limited to smaller contracts. If you're a larger contractor with poor credit, you can obtain contract bonds by providing strong CPA-prepared business financials.

Fill out our online application to see if you qualify for contract bonding.

Depending on the circumstances surrounding the case or estate, it's possible to get court bonds with bad credit. However, your credit issues can't be severe. Items such as large collections, tax liens, or civil judgments will prevent you from getting court bonds. You can apply online to determine if you're able to obtain a court bond.

Do Surety Bonds Require a Credit Check?

Yes, a bond agency will run a credit check once they receive your surety bond application as part of their underwriting process. After all, businesses and industry professionals are extended a form of credit when purchasing a bond from a surety company. This is because any claim against a bond must be repaid by the bondholder after it is initially paid by the surety company.

Therefore, a credit check is used to ensure the bondholder can and will repay any bond claims that arise in the future.

Surety companies use your credit history as a tool to assess how you might handle bond claims if they occur. As mentioned above, you're responsible to pay claims on your bond, including any legal fees. Depending on what the bond guarantees, your credit history is often a good reflection of your potential to cause and pay for claims. Exceptions are made for extenuating circumstances such as medical issues.

Some ask, "are there surety bonds for bad credit?" No, a bad credit bond type doesn't exist—but there are companies such as ours that can get you approved using specialty programs. You can also take a look at the most frequent surety bond related questions here.

A surety bond generally costs anywhere from 1% - 15% of the total bond amount, depending on the type of bond and your financial strenth. For example, a $10,000 bond will cost $100-$1,500. With bad credit, you can expect to pay toward the higher end of that scale.

Remember, there is no such thing as a "bad credit surety bond". However, surety bond companies such as ours are able to get you approved using specialty programs.

Contact our bond experts today for more information.