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+--- Thread: Surety Bond Costs and Credit (/thread-4991.html)
Surety Bond Costs and Credit - tokmik - 04-23-2010
Are surety bond costs just based off of credit? The answer is now Surety bond rates are based off of a multitude of factors. Your credit score does play a big factor in obtaining a rate, but experience, how long you have been in business for and your assets all come into play.
Experience
Almost every bond has different underwriting criteria that must be met. Some surety companies won't write your surety bond if you have not been in business certain amount of time. While others want a credit score above a 700 and they don't care if you are a new business as long as you have experience. So when apply for a bond keep a resume on hand in case you need it. Surety companies usually have set filled rates for different scenarios they may offer an established business a 1% rate and for a new business they have a set rate at 3%.
Credit
For clients that have a 670 credit score the surety may offer a client a 2% rate, but for clients that have a 700 credit score they offer you a 1% rate. Your score is not the only thing that is evaluated the surety will also take a look at how many trade lines you have as well as how long they have been open. It's possible for a client to have a 700 credit score, but only have one trade line that has only been opened for a few months.
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