Why has my surety bond increased?” It’s frustrating when your bond increases – but there are usually specific reasons why you’ve seen an increase in your bond. Instead, your credit, contract history, or public records may be factors that have upped your bond. Here are the four most common reasons most contractors’ surety bonds go up.

Your Credit Score Has Changed–For the Worse

Your FICO score (or that of whoever signs as the personal indemnitor) is the largest single factor when it comes to the price of your surety bond. If that comes as a surprise, it may be time to check your credit score.

If your credit score has taken a hit when it shouldn’t have, it’s a good idea to review your credit reports for any errors. You might have become the victim of identity theft or credit theft. Or (more likely) someone has simply made a mistake on your score. You can correct these errors by writing the credit review services with details and proof of your real credit history.

Then again, there could be legitimate reasons your score has gone down. If that’s so, talk with your bank about improving your credit score. Your bank may be able to help you raise your score, and will be more reliable than independent “credit repair specialist.” On time payments and a low debt to limit ratio are a good foundation for a strong credit score.

Your credit isn’t the only thing that affects your surety bond, however. Even if your FICO score looks good, other items can affect what you’ll be required to pay.

Adverse Items on Your Public Records

Adverse items on your public records can count against you when it comes to your surety bond, whether or not they affect your credit score. These items can include:

• Unpaid tax liens
• Civil suit judgments
• Wage attachments
• Collection items
• Unpaid or past due accounts
• Bankruptcy

You Have Open or Unresolved Bond Claims

Unfortunately, you don’t have to have an actual judgment against you or your business in order to see the price of your bond go up. If there is currently an open claim or suit concerning a different surety bond, it will likely to affect the one you’re getting now.

While this can seem unfair, keep in mind that in some cases contractors with open issue can’t get a surety bond at all. Until the issue is resolved, you will need to handle the fact that you are temporarily considered “high risk” for new bond.

You Have License Complaints on Your Contractors License

This is another factor that may increase the price of your bond. It’s true that many of these complains can seem (and often are) frivolous. But swatting at them like gadflies is not the best way to deal with them—tempting though it may be.

Even if a complaint seems frivolous or even vengeful, it can affect you financially if it sticks. That’s why it’s important to treat every complaint as though it were a serious one, and do your best to see it resolved. While it may seem like a pain to deal with, doing so can save you a lot of money when it comes to your next surety bond.

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