If you have poor credit, then you might have issues trying to find a good merchant account provider for your business. However, even if good credit will definitely help you when comes the time to search for merchant accounts, it is still possible to get a merchant account with less than stellar credit. In this article, we’re going to show you a few ways you can get a merchant account with poor credit.
Ask Your Bank
Many people are unaware of the fact that their bank may overlook their credit score if they have other positive accounts with them. Yes, personal credit with a bank can supersede credit score and you might still be eligible for a merchant account if you ask them. Also, fees and charges might be significantly lower if you open a merchant account with the same bank you have your checking account with.
Apply for a High Risk Merchant Account
High risk merchant accounts are there for 2 principal reasons: serving clients that are in high risk industries or business owners who present a personal risk themselves. High risk industries are industries that either have a large number of charge backs or are questionable in nature, such as gambling or adult for instance.
High risk business owners may have been subject to bankruptcy in the past or have bad credit. High risk credit card processing allows businesses and business owners that are considered high risk the chance to process credit card payments. While in many cases, prices will be adjusted accordingly, some high risk merchant account providers such as High Risk Pay often offer comparable rates to regular merchant accounts depending on the level of risk represented by the applicant.
Consider an Overseas Merchant Account
Overseas merchant accounts are another viable solution for people who don’t have the credit for a regular merchant account. However, overseas merchant accounts should be viewed as a last resort since they are amongst the most expensive merchant accounts out there. They usually have much higher startup fees and discount rates than other merchant accounts. On the other hand, oversees merchant account providers will rarely pull out credit reports, which is ideal for people with a questionable credit history.
Agree to a Reserve on Your Merchant Account
Some high risk merchant accounts will require that you keep a reserve in your account in order to cover for the higher level of risk your business represents. The reserve will be used to cover for charge backs, merchant fines and uncollected fees. And since charge backs can occur as late as 6 months after a transaction, each cleared transaction is basically a loan for the 6 month period in which a charge back can be filed. Over time, you can decide to negotiate the amount of the reserve or even have it removed completely.
As you can see, getting a merchant account is still possible if you have bad credit. However, you’ll have to be prepared to make some concessions. You might have to agree to higher fees and startup costs or even need a co-signer. There is also the possibility of signing up for a high risk merchant account. Either way, there are still plenty of options for motivated business owners in need of a payment processing solutions, so don’t hesitate to look around and see which option is the best for you.