Will Bad Credit Make It Hard to Get a Merchant Account?

It can be more difficult to get a merchant account with bad credit, but the right merchant account provider will be eager to work with your business, regardless of your credit history. Knowing how your credit can impact the process of finding a merchant account can help you make smarter decisions for your needs.

How Credit Affects Your Merchant Account

There are many different factors that an underwriter considers when looking at an application for a merchant account. These can include the type of industry the business is in, the country where the business is located, whether business is done face-to-face, any prior processing history, and the credit level of the owner.

How Will Chargebacks Affect Me?

Rather than bad credit, the ratio of chargebacks in your company’s prior processing history (if your company has processed credit cards before) will be a more important thing to be considered when applying for a merchant account. The chargeback ratio is the percentage of chargebacks your company has divided by all transactions processed. A chargeback occurs when a customer disputes a charge on their credit card statement.

If the chargeback ratio is 2% or higher, your application might be flagged for additional review. This is true whether you have bad credit or good credit. This is because the processor is responsible for paying successful chargebacks to the cardholder, even if they are unable to recover that money from the merchant. Chargeback risk is the main risk that a payment processor has to face.

What to Expect When Getting a Merchant Account with Bad Credit

It is not hard to get a merchant account from the right merchant account provider when you have bad credit. Still, you may want to consider raising your credit score some before getting an account if you want to maximize your options.

To find out more information about getting a merchant account with bad credit or to sign up for a merchant account now, you can visit Charge.com or call (888) 924 2743. No matter what you sell or how you sell it, Charge.com can help your business succeed and grow.

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