Improving your credit score for a surety bond can give you better rates for the bonds you need to build and secure your business. But how can you improve your credit score when looking for surety bond services? Here are three ways:
1. Check for and Remove Credit Report Errors
According to the Federal Trade Commission, about 1 in 4 reports contain errors that might have at least a small, negative impact on your credit score. Get copies of each of your credit reports from TransUnion, Experian, and Equifax—or use a service like CreditKarma—and review each line for errors.
Keep in mind that “bad” doesn’t mean “wrong,” so you shouldn’t dispute something just because it has a negative impact. Instead, look for accounts you don’t have that might mean your identity has been stolen or other inaccurate information.
If you discover something like a bill you never paid because you moved and didn’t update your mailing address with the creditor, contact them, not the credit bureau. You can make arrangements to pay and ask them to remove the reported delinquencies on your credit report.
If you discover one of the credit bureaus has done something like fail to record a payment or to remove a negative mark that is too old to be shown, you can file a dispute. If you do, make sure you have documentation to prove your case, and then contact the credit bureau showing the wrong information. Most of the time, they’re required to respond within 30 days.
2. Pay On Time, Every Time to Boost Your Credit Score for a Surety Bond
Your payment history determines a third of your credit score for a surety bond, so it’s vital that you pay your bills on time, every time. When you miss a payment, it stays on your credit report for seven years. The more recent you missed a payment, the worse it is for your credit report.
The best way to help yourself stay on track is to sign up for due-date reminders with credit card companies. You can usually get reminders at least 10 days in advance of your due date as either emails or text messages. Some utilities will also send you alerts, but you have to sign up on your own to get them.
If you find yourself unable to pay on time because of the due date, contact your credit card companies and ask to move the date to one that works better for you.
3. Stay Away from Your Credit Limit for the Best Surety Bond Rate
The second biggest impact on your credit score is your credit utilization—the balance on your credit card relative to your total credit limit. So, if you have a $6,000 balance on one card with a limit of $10,000, your credit utilization for that debt is 60%. That’s not good. It’s best to keep balances to 30% or less of your credit limit.
There are a few different ways to help yourself here:
- The obvious way is to pay that balance down as soon as you can by paying more than the minimum balance due.
- Transfer your balance to a credit card with a lower or introductory 0% APR and pay as much as you can each month.
- Call your credit card company and ask for a credit limit increase to help make your balance near or under 30% of your limit.
If you want to make sure you stay below that 30% threshold, you can set up alerts, so you get text messages or emails whenever you reach it or get close.
Remember, there are no overnight solutions, but credit card companies do report balances to the credit bureaus every month. Every little bit helps! Many negatives will disappear given time, but only if you make smart choices regarding your credit from now on. It’
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