My state bond went way up

[DPete]

Why? The surety co. says my credit report lacks activity and recent history. Well I don't really need or like credit. House, vehicles and equipment are all paid for all my business accounts are not reported to the 3 major credit report co's. so all I have is one Visa on record. Now I busted butt and did without to get in the black and my reward is my bond went up Caution to those in my place about paying cash for everything, believe it or not it's bad for your credit scores

 

[RocksnRoses]

I do not know anything about the state bonds you speak of DPete, how do they work? But I do know that if like you said, you bust your backside to get everything in the black or you never use credit facilitities, you virtually have no credit rating. I know people here who have worked hard and are well off, yet they would struggle to get credit, because they have no history. On the other side, we have used credit facilities to buy machines for thirty years and because we have never defaulted on any payments, we virtually have an A1 rating. The last machine we purchased recently, was paid for and on the way, darn near quicker than we knew what was happening, because of our history. Unfortunately, that is the way it is.

RnR.

 

[DPete]

For the honor of doing biz here in California licensed contractors are required to have a $12500.00 bond normally a minimum cost, it went up 10X because my credit report came back without much activity. Guess they think I'm NFG because I paid everything off

 

[Speedpup]

so a 12500 bond cost what?

 

[mitch504]

On the other side, we have used credit facilities to buy machines for thirty years and because we have never defaulted on any payments, we virtually have an A1 rating. The last machine we purchased recently, was paid for and on the way, darn near quicker than we knew what was happening, because of our history. Unfortunately, that is the way it is.

RnR.

I have bought 17 machines on credit over the years. The last few took less than 24hrs from saying I wanted it to funding. The down payment was completely up to me, none was fine or whatever I wanted to put down. The last time I talked to the lady who has handled them all she said it was best not to ask unless I had to cause it looked bad to be turned down, and not to ask without a 50% down payment. The companies she brokered didn't want to talk to construction or trucking.

 

[surfer-joe]

Pete, the guy I worked for in Bakersfield found out the same way you did about credit. He bought used equipment for cash and was very proud of building up his company without owing anybody. But when he wanted to expand, he found out that he didn't have the cash, and he had no credit history other than personal and that was small potatoes.

He finally sweet-talked a bank into loaning him some money, and after another couple of years he managed to get in with GE Credit and Caterpillar Financial. Now his company is going great guns and while he is still not crazy about using credit, he has seen that it's the only way to go in the construction industry today.

 

[RocksnRoses]

Guess they think I'm NFG because I paid everything off

I reckon you deserve a bloody medal, paying everything off, just dealing with the normal day to day problems that running equipment presents, without having to deal with the bureaucratic BS that the authorities in California serve up to you. I think I would have tossed the towel in long ago.

RnR.

 

[DPete]

Hell I don't know what's up, in 04' I borrowed $135000 from citi capitol to buy a scraper on a 4 year note. Paid it off early, never late and that's not on my credit report. Never been late on anything. Experian, Trans union and Equifax can kiss my ass. I've got a $100K line of credit with a zero balance at the bank I would think that should be enough to satisfy their mickey mouse bond requirement

 

[Acivil]

Bonding companies amuse me, I hate dealing with them, but its part of the biz. We finally seem to have found an underwriter that has a good grasp on whats going on, but its taken a while. I've been told by more than one person recently that their bond rate got jacked way up, and some others can't get bonded at all anymore! Its tough when margins are as thin as they are right now and your rate is 2-3%

 

[Aardvark]

Bonds= Insurance?

Whats the story with the state bond guys ?
Are they similar to public liability insurance we have here in oz or is it something else allltogether

 

[grandpa]

Dpete, get a cashiers check for the 12500 and give it to them to hold, only cost you the interest you lost on your money, which aint jack these days...

 

[imjustdave]

I have to agree with "grandpa" If your that well off "stuff paid for" they why not just cut a check to the state and be done with it.

Not to mention the saving costs of paying the ins company. never again.

 

[DPete]

Grandpa, I just may do that. Something's up in the contractors insurance biz, haven't figured it out yet but it's not good.