6 Ways To Lower Your Bond Cost and Save You Money
Are you in the process of getting a surety bond and want to lower your bond premium and save money? Then you’ve come to the right place.
Surety bond rates can vary anywhere from 1–15% of the total bond amount. Choosing the right surety bond company is one of the best things you can do to ensure you get the best rate possible for your bond, but there are many things you can do on your own.
Fix Personal Credit Issues
The first step to fixing your personal credit issues is to understand what affects your credit score. Slower or over-due payments, excessive use of your credit line, and having little or no credit history can all negatively affect your credit score.
To improve your credit score, focus on the following:
- Pay off outstanding payments like judgements, tax liens, and overdue child support
- Keep your credit cards below 30% of their limit
- Pay on-time and above the minimum needed amount
- Don’t seek out new credit cards to pay off old ones
Talk To Credit Agencies
Federal law allows you to get a free copy of your credit report every 12 months. Federal law also allows you to correct any misinformation that may appear on your report.
If you notice any inaccuracies on your credit report, send the corrections to the credit bureau in writing. Be aware that suits, liens, and judgements (even if resolved) can still appear as open or pending on your credit report. If cases like these appear on your report, send the reporting agency proof of resolution so they can update your report.
Make sure to follow up by ordering an updated credit report to confirm that all necessary corrections have been made.
To lower your bond rate, pay off outstanding payments like judgements, liens, and child support.
Improve Your Working Capital
Your working capital is your current assets minus your current liabilities. This calculation gives the surety bond company a quick look at your liquidity and your ability to pay your bills. You can boost your working capital by refinancing short-term loans into long-term liability. This will turn your short-term debt into long-term debt, which will improve your working capital.
Provide Strong Financials
A history of success will give the surety bond company you’re working with confidence that you will not need to use the bond. They will investigate how you managed your business and financials in the past and use this information to project how you will perform in the future. Providing excellent and reliable references during this process will help lower your degree of risk for the surety bond company.
Get Your U.S. Citizenship
Surety bond companies can view non-U.S. citizens as higher risk. This is because non-U.S. citizens have no physical ties to the U.S. that would keep them here to pay bond claims. Getting your citizenship can automatically lower your risk, therefore lowering your bond rate.
Pick a reliable surety bond company who can partner with you to get you the best rate.
Work With A Reliable Surety Bond Company
This is perhaps the most important way to make sure you are getting the best rate for your bond. Not all surety bond companies are alike. Some will have more underwriting than others, and some will charge hidden fees for processing a loan. Researching a surety bond company before you work with them will give you peace of mind as you start your bonding process.
What to look for in surety bond companies:
- Do they have a wide range of experience?
- How is the company’s reputation?
- Is the company’s underwriting done ‘in-house’?
- Does the company broker business through other bonding agencies?
- Can the company accommodate to your specific bonding needs?
Surety Solutions has over 50 years of experience in the surety bond industry. Our goal is to connect you with the surety bond you need, regardless of your business size or credit rating. We have financing options for higher premium bonds, and we can help you if you’re worried about your credit.
If you’re looking for a surety bond company that can get you bonded today, you’re answer is Surety Solutions.
Want to know what you would pay for your bond with just one click? Try the Bond Cost Calculator.
Originally published at blog.suretysolutionsllc.com.