Each merchant account provider follows different criteria while approving a merchant account. But if you go through the basic requisites needed to fulfill in order to get approved for a merchant account, having a positive credit rating is one of them.
Merchant account providers are wary of accepting businesses with low or poor credit ratings due to risks of high chargeback threats and frauds.
Checking Credit History
Major Banks and merchant account providers are required to do a background check once you apply for an account. Background checks entail reviewing personal credit history or business credit history or sometimes, both.
A personal bad credit can usually be approved under certain conditions. If you are a limited company or corporation, your business credit history will be reviewed, not your personal credit.
If your credit rating history does not meet the provider’s eligibility requirements, obtaining a merchant account will be difficult. In some cases, you may be offered a limited merchant account.
A credit check entails reviewing debt history, whether the past debts are paid or not. The credit history of the business, the owner as well as the business partners will be checked.
Fees – Higher the risk, higher the cost
With the risk associated to merchants with poor ratings, fees can be a concern for merchants. Merchant account providers charge a higher processing fee to bad credit merchants.
Fees can also be based on the industry your business operates under. Bad credit merchants are categorized under the high-risk industry due to obvious reasons. A high-risk business merchant will have an even difficult time getting approved. The costs will also be significantly higher for such merchants.
However, you can negotiate and adjust the fees with positive and long-term processing relationship with your merchant account provider.
Merchants also need to be careful and discuss any hidden or extra fees that may be charged by the merchant account provider. Make sure to ask around and exhaust your options before accepting a high processing rate.
Bad Credit Merchant Account
Are you having difficulty obtaining a merchant account because of poor credit ratings or previous bankruptcy? Do not worry! There are several reputable merchant account providers willing to take on your business.
Many bad credit merchants are concerned about compromising and receiving limited payment processing services from providers. However, you need not worry about getting limited facilities as there are merchant account providers offering a variety of payment options and services. Bad Credit Merchant Account solutions offered are on par with standard merchant accounts and sometimes, even better.
Choose a fitting bad credit merchant account for your business and serve your customer better!