Obtaining a merchant account with bad credit can be a struggle. Most processors and banks classify merchants under the high-risk category when they have unsatisfactory credit scores — regardless of the business type or products that the merchant sells. According to Experian’s website, “Based on the FICO® Score, from a range of 300 to 850, a credit score below 669 is considered to be either fair or bad.” Additionally, when banks are deciding to approve an account, they may look at specific items on the merchant’s credit report, not just its score.
Bad credit can stem from multiple issues — whether it is paying bills late, paying the minimum balance, accounts being sent to collections, bankruptcy or even identity theft. A merchant without credit history can also be viewed as having bad credit. Some merchants’ credit ratings are also affected due to excessive chargebacks on their existing or previous merchant accounts and/or from being placed on MATCH/TMF. Unfortunately, this means that even merchants that previously had a good personal credit score when opening their account can have their credit rating suffer due to unforeseen customer disputes.
Most low-risk banks and processors will not accept bad credit merchant accounts due to the high risk involved with the account, regardless of the reason for poor credit. Other medium- to high-risk banks and processors, if willing to approve the merchant account, will usually issue high rates and may also require a co-signer on the account and/or issue a reserve. This can be a devastating scenario for many merchants when they are not expecting to be categorized as a high-risk merchant; let alone receive the related high-risk fees and rates.
At Performance Card Service, we specialize in placing bad credit merchant accounts. We are partnered with a large portfolio of processors that are willing to work with merchants, regardless of their credit history. We pride ourselves in our superior customer service. We take the time to personally go over all of the processing options available for bad credit merchant accounts and strive to find the best available rates, fees and terms to make sure that we find a perfect fit for each business and account.
Unlike many other companies, Performance Card Service works side by side with the processor during the entire life of the merchant’s account to continually help reduce the merchant’s rates and reserve. Besides high-risk credit card processing options, we offer a wide variety of alternative payment processing solutions. Some methods available, such as our various eCheck solutions, do not require a credit check and offer rates lower than most high-risk credit card options. Please contact us today so one of our experts can begin customizing the perfect processing options for your business.