Many contractors worry that getting bonded will hurt their credit. The truth is that contractor surety bonds do not affect your credit score when you apply or renew. Credit is used only to evaluate risk. Issues arise only if valid claims go unpaid. Understanding this helps contractors apply confidently and avoid unnecessary concerns.

Bonding capacity directly impacts how much work a contractor can take on and how fast their business can grow. Understanding how surety companies evaluate bonding limits helps contractors plan smarter, win larger projects, and avoid growth roadblocks. With the right financial strategy and surety partner, bonding capacity can increase over time and unlock new opportunities.

New contractor license applicants are often required to obtain a contractor surety bond, but many don’t fully understand how it works. This FAQ explains why contractor bonds are required, how much they cost, how claims work, and what new contractors need to know to get licensed without delays.

Permit bonds are required by cities and counties before issuing construction permits and ensure contractors follow building codes and permit regulations. Unlike contractor license bonds, permit bonds are usually project-specific and tied to individual jobs. They protect the public by guaranteeing work is completed according to approved plans and local rules. Contractors in trades such as electrical, plumbing, HVAC, and general construction often need permit bonds.

An auto dealer bond is a legal requirement for most car dealerships, ensuring you operate honestly and follow state laws. Unlike insurance, which protects your business, a dealer bond protects customers and the state by guaranteeing compliance. If a dealer violates regulations, like failing to transfer titles or committing fraud — a claim can be filed against the bond. Premiums are typically 1–10% of the bond amount, depending on credit and state requirements. At All American