Surety bonds are not something people wake up and say, "Oh, I think I’d like to get myself a surety bond today." The fact is, you’re most likely reading this article because someone is requiring you to obtain a surety bond in order to conduct some type of business or service. Perhaps you want to be a notary public. Or maybe you’re an automobile dealer, a contractor bidding on a project, or a service business such as janitorial company. As soon as you discovered that you needed a surety bond, you might have asked yourself, "what is the cost of a surety bond?" We’ll try to help you come to grips with your surety bond requirement.

When trying to determine your surety bond cost, it helps to first understand up all the parameters that go into creating a surety bond quote. The reason one needs a surety bond to begin with this because they are involved in a situation, contract, venture, business, or project and there’s significant damage or loss possible if you one’s obligations are not met. In other words, there’s risk involved in the activity around which the surety bond is required for. One of the primary elements of that risk is the surety bond applicant’s credit rating. For someone with good credit, for example, the surety bond costs can be less than 4% of the bond amount. But, with poor credit ratings, the price of the bond can be very high, as much as 25% of the face value of the surety bond.

Surety Bonds Rates

GOOD CREDIT

As an example, an Oregon contractor’s license bond typically has a face value of $15,000. So a contractor in Oregon with good credit would pay roughly $400 for this surety bond. The actual price might range from $150 to $600.

BAD CREDIT

It’s very hard to give rough estimates for bad credit surety bonds, but there are several companies that can provide surety bonds for individuals with bad credit. Bad credit surety bonds, however can cost up to 20-25% of the bond face value. In the example of the Oregon contractor license bond, that means that the cost of the surety bond would be up to $3000 for someone with poor credit. For this reason, it is imperative that individuals with poor credit engage an expert to make sure they get the best possible surety bond quote.

How do you apply for a surety bond?

Obtaining a surety bond quote is quite simple. First, you will simply need to submit your personal information to a surety bond agency and answer just a few questions. Because of the importance of credit history in the surety bond application process, it’s important that the surety bond broker gets your personal information to do a credit history check. The entire application process only takes a few minutes. After they receive the application, they can usually get a surety bond quote back to you in a few hours or less, but rarely does it take longer than 24 hours.