Can I Get a Surety Bond With Bad Credit?

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A surety bond is a third party's guarantee of payment, and the issuance of such a bond may require collateral. Find out how a person can put up their house to get a surety bond with bad credit with help from a personal asset manager in this free video on the bond market and money management.

Part of the Video Series: Bond Market
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Video Transcript

Hello, I'm Roger Groh with Groh Asset Management. Thank you for spending a few minutes with me. Today we're going to talk about surety bonds. What they are, and how you might be able to get one with bad credit. An example might be, if you're a contractor and you're about to sign with a homeowner about redesigning their home, and you're worried that the homeowner may run out of money so that they will not be able to pay you, you can ask that homeowner to get a surety bond, which is a third party's guarantee of payment to you, in that instance. Now, suppose that the credit of the homeowner is lousy. They have a bad credit score. Well, that would certainly make any insurance company less willing to lend...to make the guarantee of payment to you, because they don't know if they're going to get paid, either. So it may very well take putting up an asset as collateral to make sure that the surety bond is fulfilled. In this case, it may very well be the house. Another way to do it might be to get a second party, a person, a friend, a business to guarantee the surety bond, or, in fact, to take out the surety bond on the homeowner, in this case, so that you can be....rest assured that you're going to receive payment if, in this case, the homeowner stops paying you. So, that's a little bit about surety bonds. It's a way for you to get...you can rest assured that you'll get paid in one way, shape for form, even if the person that you're doing business for runs out of money and cannot pay. I'm Roger Groh, and that's about surety bonds, bad credit, and how you can get 'em.

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