The Bad Credit Merchant Account
I can’t count how many emails I’ve received from merchants desperate to get the best merchant account, but unable to do so because of their low credit score. The truth is that they can get a merchant account…they’re just not looking in the right place.
Most processors have a low risk tolerance and aren’t willing to accept merchants with bad credit…unless they can minimize the risk somehow. Below you’ll find some ways that you can help alleviate that risk for them.
How to Obtain a Merchant Account Even w/ Bad Credit
Use a Co-Signor
Having a co-signor with good credit will immediately get you a pass from the risk department. If the merchant account provider knows that they have a second party on file that has good credit, they’ll be willing to accept your application.
If you do get a co-signor, then just look through my comparison page and find a top rated processor that suits your needs.
Find a Specialist
If you can’t find a co-signor then go with a company like Durango Merchant Services. They focus on high risk merchant accounts, so bad credit is not a problem for them. Chances are, they’ll approve you.
You can also Google “bad credit merchant account” and find plenty of providers. Just make sure they’re reputable.
Use a Third-Party Provider
Services like Paypal offer third-party payment processing, where they handle the entire transaction on their end. That alleviates some liability for them, so in most cases, they don’t even run your credit.
Offer a Rolling Reserve
Tell the processor that you’re willing to leave a “reserve” of funds with them for a while just to cover them in case you default. Of course, this will only work if you can afford it.
Offer an ACH Delay
An ACH delay is basically a delay in the deposit of processing funds to your bank account. The processor withholds your funds for a few extra days as a guarantee that all of your transactions are legit.
There you have it! All is not lost when you have bad credit.