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Merchant account credit score | How it affects your application

Posted by Alex Neir on Fri, March 09, 2012 @ 01:41 PM
Merchant Account Credit Score

A merchant account is a line of credit extended to your business.  As such the underwriting criteria for approving a new merchant account includes the credit score of all applicants presented on the application. A bad credit score does not, automatically, mean the account will not be approved. Other criteria are also considered and include; the business’s industry, the method in which credit card transactions are processed (swiped vs. keyed in), the business’s financial strength and business history.

A retail business (traditional brick and mortar) will have an easier time securing a merchant account with bad credit then an internet business or home based business. Additionally, certain industries are considered high risk and it will be more difficult to secure an account with bad credit if your business is categorized in a high risk category.  

Another consideration for securing a merchant account with bad credit is to identify a merchant account processor that specializes in account approvals for low credit merchants. Another option is the addition of a co-signer on the account. The co-signer assumes some of the risk on the account and does not need to be a principal in the business.  

Tags: Merchant Account Credit Score, Merchant Account Education, Merchant Account With Bad Credit

How to get a merchant account with bad credit

Posted by Alex Neir on Tue, March 22, 2011 @ 04:13 PM
Merchant Account With Bad Credit

How to get a merchant account with bad credit

Looking for a merchant account and your credit is less than perfect? The good news is that you have options. Having a low credit score does not automatically exclude you from opening a merchant account. Here is a list of items that can over shadow your credit score.

  • Merchant Account Type
  • History of the Business
  • Business Financials
  • Cash Reserves

Merchant Account Type.

The type of merchant account you are looking to open will place emphasis on your credit score. If you are looking to open a retail (brick and mortar) store your credit score won’t be scrutinized near as much as if you are looking to open an internet merchant account or MOTO merchant account.

History of the Business

The longer you have been in business the better. The idea here is that if you have decent business history you are giving the underwriter something else to examine other than personal credit. If the business is brand new you are forcing the analysis for approval to be centered around your personal credit as there will be nothing else to look at.

Business Financials

Similar to the history of the business, business financials give the underwriting department another peak into how your finances are being managed. If your credit score is low but you have strong financials associated with the business you are looking to set up. The chances are good that you will get your merchant account approved.

Cash Reserves

Another item that can offset a low credit score is a large cash reserve. It is best to have a least double the amount you are looking to be approved for as cash on hand. For example, if you are looking to get a merchant account approved with a monthly volume amount of $20,000, it is a good idea to have at least $40,000 as a revolving balance in your personal or business account.

If you would like help with other ideas on how to get a merchant account approved with low credit please don’t hesitate to call our expert payment processing staff at (800)917-8026.

Tags: Merchant Account, Credit Card Processing Account, Merchant Account With Bad Credit