Secrets of Bonding #90: Manage Your Credit Report

Love it or hate it, you do have a credit report and potential creditors can view it.

Credit scores have always been important in the evaluation of contractors applying for bid and performance bonds. Today they are even more important because a number of bonding programs we offer use the personal credit score as a primary basis for the bond approval.

Let’s dig into this critical underwriting element, learn about the inner workings and how to manage them.

Here are the main components used in evaluating the credit status (listed in order of importance):Credit cards

  1. Payment history
  2. Amounts owed
  3. Types of credit in use
  4. Length of credit history

Dig Deeper

Each credit bureau has reporting relationships with vendors and lenders. They gather payment info from them each month. It is likely that every credit bureau receives information from the issuers of your major retail credit cards (such as department stores and gas cards.) They may not, however, know all of your creditors. Therefore it is possible that credit bureaus may show different data and credit scores.

Regarding amounts owed, the dollar amount may not necessarily lower your score. It is more detrimental if you are using a high percentage of your available credit. This is viewed as a possible indication of financial stress.

The type of credit you use is not a major factor in determining your score. However, you should refrain from opening new credit cards unnecessarily. It may also lower your score if you do not have any credit cards. Managing credit card debt responsibly helps raise your score.

Applications for new credit can lower your score, especially if you do not have a long credit history. It does not lower your score if you order your own report directly from the credit bureau.

Manage Your Credit Report

Step one is to order a free copy of your credit report and check it for erroneous information. Mistyped social security numbers and name spelling errors can result in other people’s bad information appearing in your report. This happens more often than you might think.

If you do find inaccuracies, write to the credit bureau, provide an explanation and evidence (such as proof that a disputed account was settled) and demand a correction.

Other tips:

  • Set up payment reminders
  • Reduce the amount of debt you owe
  • Pay your bills on time
  • Talk to creditors if you are having difficulty making payments


Your credit score matters for bonding and other purposes. It is worth taking the time to manage, and maximize it.

Disclaimer: We are not credit counselors and are not providing financial advice! We are Surety Bond Specialists.  If you need a credit counselor, contact one.  If you need a bond, call us!

FIA Surety is a NJ based bonding company (carrier) that has specialized in Site, Subdivision, Bid and Performance Bonds since 1979 – we’re good at it!  Call us with your next one.

Steve Golia, Marketing Mgr.: 856-304-7348

First Indemnity of America Ins. Co.

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