Yes, your credit does affect the cost of your surety bond. However, you can certainly still get a surety bond with bad credit. This is actually one of the key components of the process. So, if there is a way to clean up the credit score, by all means, try to do that before applying for a surety bond. The score should be above 625. This is important because the insurance carrier is trying to determine the risk that the person they are offering the surety dealer bond with bad credit to will actually pay the premiums. It is like any other loan really. There is a risk to those that offer these surety bonds and the companies try to make educated risks.
A low credit score could mean there is more risk for the company that offers surety bonds. If you are a person that doesn’t care about your credit score then you might not care about other factors such as paying your bills. Because of this, the premiums and interest tend to be a bit higher.
A dealer bond with bad credit will typically cost as much as 2.5 more for those that have bad credit. And, it can have a premium cost that is double what a person with good credit would have. Your credit is important to your way of life. Be sure that you have good credit in order to save some money on these surety loans.
A surety loan is possible with poor credit.
Most agencies have dealt with people with bad credit as well as no credit. Poor credit shouldn’t stop you from getting a surety bond. Just like a car loan, it might take a little time and some shopping around to find someone that is willing to take on your case. However, it is possible. Most places understand that situations happen. After all, we all go through things throughout life. They may need an explanation of why your credit is low to fully access the risk.
Another option should the person apply for the surety bond that has bad credit is a co-signer. This is someone that is trusted by the person applying and shows a much better credit score than the applicant. A co-signer might also bring down the premiums and additional costs, should they have good credit.
It is important that when you are seeking out help for a surety bond that you fully understand what is expected of you. You should read up on the guidelines and speak to an attorney to be sure that the surety bond offered is in fact what you need.
Ways to improve credit scores is set up payment reminders, place a priority on debt repayment, think about the timing of your application as each check on your credit will lower it. Of course, always take a look at your credit report at least once a year to ensure that it is accurate. It is easy to get discrepancies on your report that are easily proven and can be removed. Things such as a car loan from 2 years ago that you no longer own is an example of things people find on their credit reports.