In today's economy, many people are finding themselves in tough financial situations and consequentially seeing their credit scores plummet. Some have fallen on hard times because of foreclosure, high credit card balances, medical bills, divorce, or other factors. Regardless of the reason, credit affects one's ability to qualify for a surety Bond. Read more below on how to obtain a surety bond with bad credit.
At Viking Bond Service, Inc., we realize that not everyone has exceptional credit. However, a surety bond may be required in order to operate. Viking Bond Service, Inc. has access to several programs specifically designed for the "credit challenged" Principal. These programs' forms are short, simple to complete, and the turnaround time to obtain the Bond is a quick process.
The cost of obtaining a bad credit surety bond is generally higher by nature. Sureties generally charge by their calculated risk (as do other insurance companies with other lines of coverage). So the higher the risk - the higher the premium paid to induce the Surety to take the risk.
The good news is that after the first year's premium is paid, Principals have the opportunity to begin repairing their credit. If credit can be repaired, or at least improved adequately by renewal time, then the cost of renewal for the bond may be reduced to a fraction of what was paid for initial term under poor credit conditions. At Viking Bond Service, Inc., we take a fresh look at each Bond file every year prior to renewal. Our in-house renewal department runs credit and reviews all files, including high risk cases, to see if they can be remarketed to standard Sureties with much lower premiums. In some cases, we are able to work with our markets to get premiums lowered simply because of the relationship developed between the Principal, the agent (Viking Bond Service, Inc.), and the Surety. We may for instance show the Surety that client A has been with us for X many years without any claims history, and we feel that the client is a good risk thereby deserving of a lower rate.
If you or any of your insured clients are in need of a surety bond and credit is an issue, feel free to contact us for further information. Not all bond types and/or amounts qualify, however, most standard license and permit bonds $50,000 and under can be written through this program. Contact us today for more information.