High Risk Surety Bond Overview
Sureties consider a credit score of 650 FICO or lower "low" or "bad" credit. Sometimes, applicants with a score over 650 may also be considered "bad credit applicants" if they have tax liens or judgments against them.
Why are rates higher for applicants with low credit?
Bonding companies do not operate like insurance companies. Where an insurance company assumes a certain amount of claims on their policies, the surety bond industry assumes a 0% loss ratio.
With such strict guidelines, only those with good credit (at least a score of 650, oftentimes higher is required), and clean history (no bankruptcies, tax liens) are approved for low rates. For those who do not meet those criteria, there is an alternative.
For those with low credit or new businesses with no credit history, bonds are issued at higher rates. Rates for such applicants are higher than for applicants with high credit. Additionally, to get a bond with a low credit score, a small percentage of cash collateral is required to supplement the risk.
Please note: Only commercial bonds are issued for applicants with bad credit. Contract bonds (including performance bonds) are not available through this program.
In the video below, you can find more information about how you can proceed if you have a lower credit score but still want to get bonded.
How Much Do Bonds for Bad Credit Applicants Cost?
Rates for applicants who have a low credit score begin at 5% of the total bond amount and can be as high as 15%. The exact rate at which you can get bonded will be determined by the surety once you complete and submit a bond application form.
You can learn more about the factors that influence the cost of a bond through our bond cost guide!
How can I improve my rate?
You can get increasingly better rates on your bond by improving your credit score, and your personal and business financials. You can also improve your bond rate by resolving any tax liens, civil judgments, unpaid debt, etc.
How much will my bond cost?
You can get an estimate of the cost of your bond by using our bond calculator below! For a precise quote, complete our bond application form.
Surety Bond Cost Calculator
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How Do I Apply For a Bond With Bad Credit?
To get started, complete our bond applicant form. We’ll contact you shortly to provide you with a free and 100% exact quote on your bond. We’ll also provide you with further details on how to complete the application process.
If you need to know more about getting bonded with a lower credit score, call us at 866.450.3412 anytime!