Credit scores for individuals and businesses can suffer due to circumstances beyond your control. Unfortunately, a damaged credit score can make it feel nearly impossible to secure financing, or the bonding you need to operate. Since various types of bonds are essential for starting a business or competing for contracts, finding a way to get bonded is critical.
The good news? A low credit score doesn’t automatically disqualify you. Many surety companies offer bad credit surety bonds, even if your business falls into a high-risk category. While these bonds typically cost more because of the perceived risk, the right surety partner can help you stay competitive and keep your business moving forward.
Why Credit Scores Matter for Surety Bonds
Surety companies use credit scores as a key indicator of financial responsibility. A lower score signals higher risk, which impacts the premium you’ll pay. However, credit isn’t the only factor considered, business history, financial statements, and collateral can also influence approval.
Just How Bad Is Your Credit Score?
Your credit score is a numeric snapshot of your creditworthiness. For individuals, the three major credit bureaus are TransUnion, Experian, and Equifax. For businesses, the most common sources are Dun & Bradstreet, Equifax, and Experian.
Here’s a quick breakdown of personal credit score ranges:
- Exceptional: 800+
- Very Good: 740–799
- Good: 670–739
- Fair: 580–669
- Poor: 579 or below
If your score is 579 or lower, or if you have little to no credit history, you’ll likely be considered high-risk. While this makes traditional financing difficult, you can still qualify for bad credit surety bonds.
Common Bonds Available for Bad Credit Applicants
Even with poor credit, you may still obtain:
- Contractor License Bonds – Required for licensing in many states.
- Performance Bonds – Guarantees project completion.
- Payment Bonds – Ensures subcontractors and suppliers are paid.
Some ways to improve your approval odds is to provide financial documentation to show stability, offer collateral to reduce perceived risk and work with reputable surety agency that specializes in bad credit programs.
Getting A Surety Bond With Poor Credit
Applying for a poor credit surety bond is a fairly simple process, and it is not much different from the normal process. You will generally have to apply specifically under a poor credit program offered by a surety company, and that will alert the surety company to evaluate your actual creditworthiness and to calculate a monthly premium which would be fair, given the higher risk involved.
Your application has to be considered in the high-risk category because it is assumed that as an individual with poor credit, you are more likely to cause conditions that would trigger claims against the bond and that you are more likely to default on paying that claim out when one is made. These assumptions may indeed be entirely unfounded and inappropriate in your case, but they are legally supported, and will always come into play when your credit score falls below a certain threshold.
You will receive a quote for the premium which has been calculated, and you will then have the option of whether or not to accept that assessment. If you do, you will then only have to sign a contract, pay the first premium, and you will be issued the bond that you need. Assuming that you regularly make your premium payments, your bond program will remain in force for the entire agreed-upon period.
Where to Apply For A Bond
When looking to secure a bond, the best place to start is with NFP, the nation's largest insurer and issuer of all kinds of bonds. Because we have access to a large number of insurance carriers and has a strong presence in literally dozens of markets, we can find a solution for virtually all bad-credit applicants, and acquire the bonds you need. It may cost a little more to get bonded with bad credit, but you can count on NFP to help you find what you're looking for.
Frequently Asked Questions
Can I get a bond with no credit history?
Yes. Many surety companies treat no credit history similar to poor credit and offer programs for new businesses.
Will my premium decrease if my credit improves?
Often, yes. Renewals may reflect better rates if your credit score improves.
How long does the application process take?
Most applications are processed within a few business days.
