5 Ways to Lower Your Surety Bond Premium

Your surety bond premium isn't fixed. It's based on your risk profile, and there are concrete steps you can take to bring it down. Some of these save you money at your next renewal. Others pay off over the longer term.

Here are five strategies that actually work, based on how surety companies price bonds. For a full breakdown of what drives bond pricing, see our surety bond cost guide.

1. Improve Your Credit Score

Your personal credit score is the single biggest factor in your surety bond premium. Surety companies use it as a proxy for financial responsibility — the same way auto insurers use driving records.

Industry estimates suggest that improving your credit score by even 50 points can reduce your bond rate by 1% to 2% of the bond amount. On a $25,000 contractor license bond, that's $250 to $500 per year in savings.

The fastest ways to move the needle:

• Pay down credit card balances — utilization under 30% is good, under 10% is better
• Dispute errors on your credit report — about 1 in 5 reports contain material errors (FTC)
• Don't close old accounts — length of credit history matters
• Set up autopay — one missed payment can tank your score for months

If your credit is below 600, you'll likely be quoted in the "high risk" tier — 5% to 15% of bond amount. Getting above 650 typically drops you into the 2% to 5% range. Above 700, you're looking at 1% to 3%.

2. Use the SBA Surety Bond Guarantee Program

If you're a small contractor who can't get bonded at a reasonable rate — or can't get bonded at all — the SBA program changes the math. The SBA guarantees 80% to 90% of the surety's risk, which means the surety company is far more willing to offer competitive rates.

Current limits: $9 million for general contracts and $14 million for federal contracts. The SBA's fee is 0.6% of the contract price for performance and payment bonds. Bid bonds are free.

The program is especially useful for performance bond costs on larger contracts, where standard-market premiums can run $15,000 to $50,000 or more.

3. Build a Claims-Free Track Record

A bond claim is the surety industry's equivalent of an at-fault accident. One claim on your record can increase your premiums by an estimated 2x to 5x — and it stays on your record for years.

The flip side: a clean claims history is one of the strongest factors working in your favor. Sureties reward principals who have never been claimed against with their best rates.

If you're not sure what triggers a claim or how to prevent one, read our guide on how to avoid surety bond claims. For a deeper look at how the claims process works, see surety bond claims explained.

The most common claim triggers:

• Not paying subcontractors or suppliers on time
• Abandoning a project before completion
• Violating the terms of your license or permit
• Customer complaints to a licensing board (for license bonds)

4. Shop Multiple Surety Companies Through a Broker

Surety companies don't all price the same risk the same way. One carrier might quote you 3% while another quotes 1.5% for the exact same bond. Industry estimates suggest rates can vary 30% to 50% between carriers for the same applicant.

Working with a broker — rather than a single surety company directly — gives you access to multiple carriers in one application. The broker submits your information to several sureties and brings back the best offer.

This matters most for contractor license bond premiums and construction bonds, where the dollar amounts are high enough that a 1-2% rate difference adds up fast.

A few things to know about shopping:

• Surety applications are "soft pulls" — they don't affect your credit score
• There's no cost to get multiple quotes
• Online brokers (like us) typically access 10-20+ carriers at once
• The carrier with the best price for one bond type may not be the best for another

5. Consider Multi-Year Bond Terms

Some surety companies offer two-year or three-year bond terms at a discount compared to renewing annually. Industry practice suggests savings of 5% to 10% over the equivalent annual premiums.

Multi-year terms work best when:

• Your bond requirement is stable (not changing at the next legislative session)
• Your credit is good now and you want to lock in the rate
• You're holding a license bond, notary bond, or other "set it and forget it" bond type

The trade-off: if your credit improves significantly during the term, you can't renegotiate mid-term. But for most people, the upfront savings outweigh that risk.

Quick Reference

All savings figures are industry estimates and will vary based on individual circumstances, bond type, and carrier.