Acquiring A Bad Credit Merchant Account

Jul 19, 2022

When it comes to being approved for a merchant account, your personal credit score is considered one of the most important elements used during the underwriting process.

Although you can get approved for a merchant account with bad credit, know that the terms and conditions will be vastly different. Be prepared to pay more on your service fees. Furthermore, a processing bank may need to set up a reserve to protect themselves against risk and any future losses for taking you on as a client. 

Bad Credit Merchant Account Defined

A bad credit merchant account is a merchant account that has been granted to a business owner that has a very low personal credit score or has suffered bankruptcy. Since these types of merchant accounts fall under the high-risk category, they are typically more expensive than low-risk merchant accounts. 

Although every merchant account provider differs as to what they would define as a “bad credit merchant”, in general, the situations are basically the same as the following:

  • Previous bankruptcy

If your business failed and you had to file for bankruptcy or had to file for bankruptcy yourself, then you will be considered a bad credit merchant. Since bankruptcies last between 7 to 10 years, depending on the type of bankruptcy, you will need to wait a long time before you will be able to open a low-risk merchant account.

  • Low personal credit score

You will most likely fall under the bad credit category if your FICO score falls below 580. However, this only applies to first-time business owners. 

  • Judgments that are outstanding

If you have an outstanding judgment through a civil or criminal court, this will negatively impact your credit. Only until it has been entirely paid will you have access to a low-risk merchant account. 

  • Liens that are outstanding

If you happen to have a lien on your property, this can also negatively impact your credit score and place you in the bad credit merchant category.

What To Look For When Choosing A Bad Credit Merchant Account

As a high-risk merchant, you still have the choice to select the best bad credit merchant account that suits your needs.  When seeking a bad credit merchant account provider, determine whether or not they offer the following features:

  • No account set-up fees
  • Superior customer service
  • Offshore accounts for international merchants
  • Fair pricing and contract terms
  • Fast underwriting
  • Multi-currency options
  • ACH and e-Check processing

What Do You Need To Open A Bad Credit  Merchant Account?

If you need a bad credit merchant account, then look no further than EMB (emerchanbroker.com). EMB  specializes in high-risk merchant accounts and offers a tailor-made solution to suit your particular business needs.

If you want to know how to get started, you simply have to fill out an application on the EMB website. Once the application is completed, you will need the following documentation to submit with the completed application:

  • A bank letter or a pre-printed voided check
  • A valid, government-issued ID ( a driver’s license)
  • 3 months of the most recent bank statements
  • 3 months of the most recent processing statements, if applicable
  • An SSN (Social Security Number) or EIN (Employer Identification Number)
  • A secure, fully-operational website
  • Chargeback ratios must be under 2%

EMB does not guarantee approvals, however, they do guarantee that your application process will be quick and simple. Approval can be reached within 24 hours. 

Open Your Bad Credit Merchant Account Today

Having a bad personal credit score will not bar you from opening up a merchant account. However, the best financial move is to keep your finances in good order, pay your bills on time, and only apply for the amount of credit you need. 

By taking these and other steps, you should be on your way to improving your credit score. 

Let us help you get a high risk merchant account today!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.