Keeping Score: Bail Bonds And Your Credit

A question that doesn't come up that often — mainly because people don't really think about it at the time — but has an effect on your life is what cosigning for a bail bond does to your credit. Bail bonds don't really go on your credit report, but they can have small effects in general, and huge effects if something goes wrong. You really need to be careful about how you get that bail bond because the consequences of things going wrong go beyond just losing something of value.

Unfreeze Your Reports

First, you may have to go through a credit check to get the bail bond, so thaw any freezes you have on your reports. The bond agency might do a soft credit check, which does not affect your score, or they could do a hard credit check, which would lower your score by maybe a few points; this type of drop tends to recover quickly. Checking a potential cosigner's credit score is something a lot of bond agencies do to see if your financial situation indicates that you might not be able to come up with all of the cash in case the defendant skips bail.

Only Get the Bond if You Know the Defendant Will Show

If the defendant skips bail, you're out whatever you used as collateral. Maybe that's all your savings, or maybe it's a car or more. If you're suddenly wiped out financially and have to start putting everything on credit cards as you build your savings up again, you are going to see your score drop from higher utilization. Or, maybe you can put the entire bond on credit cards, but then you still face that utilization problem and can see a big drop in your score that takes a long time to recover from. You really have to be sure that the defendant will show up to their court hearing before you get the bond.

Think Twice Before Choosing Non-cash Collateral

You can use cash to get the bond or put something up as collateral, like a car, house, or another valuable item. But if the defendant skips and you lose your collateral, you could be in deep trouble not only because you've lost your house or car, but because now you face financial consequences of not having a place to live, or not having transportation to get to work. Again you end up with excessive credit usage plus the added issue of lots of inquiries on your report as you apply for different places to live in. You may have to take out a car loan to get another car, leading to an increase in debt and a decrease in your credit score.

To learn more about bail bonds, contact a bail bondsman in your area.