
Having poor credit is not rare for business owners. This is because they sometimes have to sacrifice their credit score in order to start up their company or save their business from a few slow months. Unfortunately, having bad credit can be a big problem for businesses that must accept credit cards to stay competitive.
This is because getting merchant services with a poor credit history is challenging as most banks and payment processors don’t issue the account to such business owners.
That being said, it is still possible to get a merchant account and there are some things that you can do to achieve this. Following are some tips that will help you in this regard:
Apply For Merchant Services At A Bank
If you have other positive accounts with your bank, then it is recommended that you ask your bank if it offers merchant services. Your bank may offer you a merchant service despite your bad credit score. Furthermore, you can expect to have your merchant account opened with lower fees and startup costs if you have other positive accounts with the bank.
Adding A Co-signer On Your Application
Another great way to get a merchant account with bad credit is to have someone with a good credit score act as a co-signer on your application for opening a merchant account. By doing this, you will allow the processor to consider the personal credit of the co-signer on the merchant account application, hence leading to guaranteed approval.
Rolling Reserve Account May Be An Answer
Allowing processors to impose rolling reserves account on your account can also help you get merchant services with poor credit. And the best thing about it is that once a good processing record is established, both of these stipulations get removed. However, keep in mind that if tax liens or collections are an issue or your personal credit is exceptionally poor, then rolling reserves and ACH delays may not be an option.
Apply for a High-Risk Merchant Account
High risk payment processors are specifically made for businesses that cannot get approval from most other financial institutions. So, no matter whether you have a bad credit score or your business belongs to a high-risk sector, a high-risk merchant account provider will support you. These payment processors have generous customer policies so your chances of approval are great. However, keep in mind that since you have bad credit, you will be charged a higher fee for the service.
Consider an Overseas Merchant Account
Opening an overseas merchant account is another viable solution. A lot of businesses with poor credit tend to open overseas merchant account because overseas merchant processors generally don’t pull credit reports. However, there are a few downsides of opening an overseas merchant account e.g. higher discount rates and processing fees. Apart from this, you also have to take currency restrictions, processing laws, and taxes into account. So, this solution should be used as a last resort.
Closing Thoughts
In conclusion, there are a number of ways to get a merchant account with bad credit. It is recommended that you choose the solution that best suits your preferences.
About The Author

Mark Sands, co-founder of High Risk Merchant Account LLC, an authoritative expert in the high risk merchant account space. Mark has decades of experience in the payment industry & enjoys writing on entrepreneurial related topics.

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