It’s never smooth sailing for small upcoming business. The challenges that come with running your new business may go out of hand depending on different factors. So if you’ve suffered bad credit or bankruptcy from a previous business enterprise, then you’re definitely a high risk retailer who will need a bad credit merchant account.
What’s a bad credit merchant account?
These are merchant accounts issued to retailers with bad credit, in most cases, a poor FICO score. Underwriting banks will always check on your credit score, and with a bad score, chances are; you might not get approved for normal merchant accounts.
Therefore if you want to begin accepting credit cards, your only option is seeking a bad credit merchant account from a high risk processor. However, high risk processing normally has slightly higher processing rates compared to low risk processing, and often come with additional limits e.g. limited processing volume, funding delay etc. But most of these limitations are lifted after some months of successful processing.
Who Offers High risk Bad credit Merchant Accounts?
With poor credit ratings, you obviously won’t be underwritten by traditional banks that sponsor low risk credit card processors due to your high risk nature. On the other hand, high risk merchant service providers are experts in dealing with high risk credit card processing.
They usually have slightly higher processing rates, and may add a few restrictions to the account, to ensure the processor doesn’t suffer significant losses in case things go south in your account. In general, these protections also favor merchants, as this level of comfort enables you to process with slightly lower rolling reserves or higher chargeback limits. So never waste your time applying for a bad credit merchant account with a low risk merchant service provider.
The easy way to go about it is to apply with a high risk credit card processor. But first, it’s good to check your credit score versus your future processor’s score line before submitting an application. This is because it’s the first thing all high risk merchant service providers will check before approving you.
Don’t lose hope because of bad credit. Your business can still get back on its feet; thanks to high risk merchant service providers who are now more than willing to help high risk retailers.
