According to some research, 39% of businesses have bad credit.
Having bad credit for your business can make it hard to find merchant account services so that you can accept secure payments.
But that doesn’t mean you can’t find a merchant account service. You just have to know what to look for. Keep reading, and we’ll help you find a merchant account service even with bad credit.
A bad credit merchant account is a merchant account that is issued to a business owner who has a bad credit score. They are also helpful for businesses that have previously filed for bankruptcy.
The bad credit merchant account is normally high risk, so they can help you, but they’re often more expensive than a low-risk account.
If you have bad credit, then you may want to consider getting a bad credit merchant. That’s because, with bad credit, it’ll be very hard to get a regular merchant.
The step for getting this merchant will be very similar to applying for a loan. in general, you’ll want to use a bad credit merchant if you have a low personal credit score, have a history of bankruptcy, or have some liens on your property.
If you have a bad credit score that is 600 or less, then you’re likely in the bad credit category. This is normally for new business owners who don’t have any credit established. However, it can also apply to businesses that have had other financial issues that would ruin their credit.
One thing that could ruin their credit is bankruptcy. Bankruptcies will stay on your credit report anywhere between seven to ten years, and it can be a long wait for your business.
Your business could also have an outstanding lien on your business. This can affect your credit score, but the banks will evaluate the circumstances that are surrounding your lien before they decide whether or not it will affect your credit score.
For example, if you have a lien and have unpaid taxes, this will hurt your credit. If a lender filed a lien as collateral for a loan, this likely wouldn’t affect your credit score.
Before you apply for a merchant, you’ll want to take some steps to try and maximize your chance of being accepted. The first thing you do is try and repair your credit.
This can be hard if you’re on a time crunch, but if you have some time before applying for a merchant, try paying off as much debt as possible and paying on time.
If you don’t have time to raise your credit score, have an explanation ready for why your credit is bad. Gather as many documents as possible.
Also, make sure that you have all of the legal and license requirements that you need for your business. You’ll also want to have basic information like your business tax ID.
If you need a merchant account but have bad credit, there are a few steps you’ll need to take. In general, it’s the same as applying for a merchant even if you have good credit.
First, you’ll want to have a good business structure for your business. Having a plan shows merchants that you are planning for your business in the long run.
You can also apply for all of the business licenses that you need. Then, you can have a traditional business bank account (if you don’t already have one open).
You’ll then need to choose what types of payment methods you want to expect. After that, have terms of service and refund policy. Ensure that you’re meeting all of the PCI compliance.
Next, you’ll want to collect the documents that give information on your business. For example, you’ll need to show how big your business is, how much processing you’ll be doing, and how old your business is.
Once you have all of that information, find some different merchants and then apply online. You’ll have to go through the underwriting process, so make sure that you have some bank statements ready to provide.
Before you decide to partner with a provider, make sure that you look at all of the fees and ensure that you’re getting the best rate possible.
Once you have all of this information ready, you’ll need to carefully choose what service you want to partner with. Look for ones that deal with high-risk clients.
You want to choose a provider who can still offer you all of the security measures and secure processing that you would have with a low-risk merchant.
To get the most out of your merchant, make sure that they have transparent pricing structures. They should outline the fees for chargebacks, transactions, and processing payments.
Some merchants will have hidden fees that have very high rates, which can make it even harder for your business to get out of bad credit.
You should only sign a contract with a merchant who has transparent credit card processing fees.
Before you sign a contract, make sure that you look at all of the agreements. You’ll likely need to sign a long-term contract, so you want to ensure that this is actually a business that you want to partner with.
Keep in mind that some merchants will charge a fee for breaking a long-term contract early.
These are only a few things you need to know about getting a merchant account service with bad credit, but you should make sure that you choose the right provider for you.
If you’re interested in finding the right merchant account service, we’re here to help you out.
Check out our website to discover more about how we can help your business with online payments!