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How Much Does A Surety Bond Cost If I Have Bad Credit?

By Crystal Ignatowski on Apr 14, 2017 12:15:00 PM in

Cost of Surety Bonds

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bad credit surety bond

 

So you are starting a new business and you need to get licensed and bonded, but your credit isn’t that great. For individuals with bad credit, surety bond costs can increase dramatically, and fast.  

See what you'd pay for a surety bond with bad credit. Get a free quote.

 

What is Bad Credit?

In the surety bond industry, ‘bad credit’ or ‘non-standard’ is considered to be a FICO score of below 650.

FICO scores range from 300 to 850 and are classified as follows:

  • 750 or above: excellent
  • 700-749: above average
  • 675-699: good
  • 650-674: fair
  • 550-649: subprime
  • 549 or lower: poor

When you purchase a surety bond, you won't have to pay the full bond amount. 

You will pay anywhere from 1-15% of the total bond amount.

If you have good credit, you can expect to pay 1-3% of your total bond amount (sometimes even less, as low as 0.5%). If you have bad credit, you will have to pay more, anywhere from 4-15%.

 

So how much do you pay?

  • $50,000 surety bond with good credit: You pay $500 - $1500
  • $50,000 surety bond with bad credit: You pay $2000 - $7500

 

The below chart shows ball-park estimates. To see exactly how much you'd pay for a surety bond, get a free quote below.

surety bond cost with bad credit

 See what you'd pay for a surety bond with bad credit. Get a free quote.

 

Do You Need a Bad Credit Surety Bond?

Do you need a surety bond, but are worried because you have bad credit? We have negotiated rates on the low end of the spectrum so you can get a surety bond with bad credit. 

We've bonded people who never thought they could ever get a bond!

 

Get FREE Bond Quotes (Even With Bad Credit)

 

Worried about a past bankruptcy? Check out this post on getting approved with a bankruptcy.

 

Calculate the Cost of Bad Credit Surety Bonds

So how is your bad credit cost calculated? To calculate bad credit surety bond costs, think of a function machine. Many many factors go into a function machine to create an equation and then out pops an answer on the other side. Now apply this to surety bonds.

 

What goes into the function machine is the type of bond, the obligee (or the person who is protected by the bond), the applicant, and the surety company who issues the bond. This all determines the price, or rate, you'll pay for your bond.

 

Bond Type + Obligee + Applicant + Surety = Price of Bond

 

The important thing to recognize is that if you have bad credit, you can still get bonded. 

 

See what you'd pay for a surety bond with bad credit. Get a free quote.

 

How To Improve Bad Credit

 

 

 

Avoid Paying More

There is a way to avoid paying an arm and a leg for your surety bond: if you shop your bond with the right surety bond companies, you have the ability to get your bad credit surety bond at the lowest rate possible.

 

This is because surety bonds are not only dependent on your credit history, but on if the surety company you go through has access to the lowest rates in the surety market. There are over 25,000 varieties of surety bonds in the US, so you can only imagine the range of costs.

 

Choosing the right surety bond company—one that will shop your risk to find you the lowest possible rate for your surety bond—is the first step you should take when trying to get a bad credit surety bond.

 

Related links:

The Important Connection Between Your Credit Score and Surety Bond

How To Get A Surety Bond With Bad Credit

12 Influences of Surety Bond Cost and How To Get Around Them