Payment Processing and Merchant Accounts With Bad Credit
How can we help you start processing payments with bad credit?
- Nathan Beck
- 07/11/2025
Key Takeaways for Bad Credit Merchant Accounts
- Bad credit isn’t fatal. High-risk processors still approve merchants with scores under six-hundred.
- Gather your docs EIN, three months of statements, product details, and photo IDs go through the secure portal.
- Fast underwriting. Approvals land in three to seven days, with a rolling reserve of five to fifteen percent.
- Guard your chargebacks. Keep them below one percent to lower fees and shrink the reserve over time.
Can You Get a Merchant Account With Bad Credit?
Absolutely! Let's Dive Into the Nuts & Bolts of How to Begin to Process Credit Cards Again.
"Durango Merchant Services works hard to avoid imposing termination fees on our clients. Sometimes in negotiations with banks it becomes unavoidable, but as a core value, we are more concerned with helping our clients make money and earning their trust as an incentive to keep their merchant account with us and our partners"
Who is Durango Merchant Services?
What Makes Durango Merchant Services Stand Out from the Competition?
- Tried and true expertise in navigating the high-risk industry
- Strong global connections with US based and international banks
- Cutting-edge payment processing technology
- Personalized consulting to improve chances of approval
- Omni-channel payment support
- Recurring billing capabilities
- Focusing on the growth and stability of our clients
- Personal account manager with 10+ years of experience
- eCheck Processing through ACH
- Well reviewed and documented reputation in the payments industry
- Thousands of merchants beginning to process payments again
- Top of the line service for the high-risk sector
How Does Having Bad Credit Affect Your Chances of Getting a Merchant Account?
Once you've built a solid history with our partner processing bank and improved your financial situation, you might consider looking for an account with better terms. But first, give your current bank a chance to review and enhance your terms. After all, they took a chance on you when others wouldn't, so give them a chance to retain your business. We are here to help facilitate this.
Why does bad credit lead to more merchant-account rejections?
Solution & Opportunity
Here at Durango Merchant Services, we pride ourselves on our holistic approach to evaluating businesses. We know all too well that a low credit score isn’t the full story and certainly not a deal-breaker for a business's success or reliability. That’s why we dive deeper, looking at the whole picture including your business model, market potential, and the wealth of experience you bring to the table. This comprehensive perspective allows us to craft more nuanced risk assessments, improving the chances we can support your business where others might not.
Why does bad credit raise processing fees and trigger rolling reserves?
Acquiring banks price each merchant’s risk. A low personal or business credit score signals a higher chance of chargebacks or early account closure, so processors offset that exposure in two ways:
Risk-markup on every transaction – usually 0.30 %–0.75 % above standard interchange-plus rates.
Rolling reserve – typically 5 %–10 % of daily card volume held for 90–180 days, acting as a security deposit if disputes spike.
Tips to keep extra costs in check
- Maintain chargebacks under 1 % with real-time fraud filters and clear billing descriptors.
- Convert potential chargebacks into refunds by issuing credits quickly.
- Set accurate product descriptions and shipping timelines to avoid “item not as described” disputes.
- Monitor daily reserve settlements in your gateway to forecast cash flow and prevent surprises.
How can you navigate stricter contract rules when your credit is low?
While looking for a merchant account with poor credit, you might notice the contracts temporarily get a bit tighter with less wiggle room. Think longer commitments with some limits on how much you can sell or how big those sales can be. It can feel a bit overwheming, especially when you’re trying to grow or pivot your biz. But here’s the deal: with a bit of savvy negotiating and a plan the offset the risks associated with bad credit, you can strike a balance that keeps you moving forward without feeling boxed in.
Opportunity
The entirety of our bad credit merchant account service is predicated on helping keep finances flowing for businesses so they can improve their position as quickly as possible to focus on their core offerings. While tighter rules might be unavoidable, our dedicated account managers will help you get better rates as your position improves. As we wrote before, we know that a credit score is not the entirety of a business or owner and we want to partner with you to take the journey to less imposing terms and more freedom.
Table of Contents
Call to talk to one of our account managers today!
How can I open a merchant account with bad credit?
Step-by-step process for getting approved by a high-risk payment processor when your personal or business credit score is below 600.
Required Tools:
Things Needed?
Steps to configure the HowTo widget:
How can I improve my business credit score?
How a business credit score is calculated can feel like a maze, and while there’s no magic button for an instant boost, certain strategies can set you on the right path:
- Timely Bill Payments: One of the simplest yet most effective habits is paying your bills on time, or even better, ahead of schedule. This not only keeps your score healthy but also builds a solid payment history.
- Monitor Your Account Balances: Aim to keep your balances positive or within any agreed overdraft limits. Double-check your account to ensure there are sufficient funds for any outgoing payments.
- Personal Credit Matters Too: Especially for newer businesses, your personal credit can come under scrutiny. Keeping your personal finances tidy can reflect positively on your business's creditworthiness.
- Be Strategic About Credit Applications: Only reach out for extra credit when it's truly necessary. A flurry of applications in a short period can signal financial distress, nudging your score down.
- Choose Partners Wisely: The financial health of the suppliers and clients you work with can indirectly impact your credit score. Aligning with financially stable entities is beneficial.
If your business is bouncing back from financial hurdles, securing a merchant account tailored for those with bad credit might be a game-changer. Yes, the fees and terms might be less than ideal compared to standard accounts, but payment providers processing providers like Durango Merchant Services are ready to back your business when others might hesitate. It’s about finding a partner willing to support your journey to financial recovery and beyond. We will work on your behalf to be that partner.
Others Have Succeeded and You Can Too.
Courage doesn't always roar. Sometimes courage is the quiet voice at the end of the day saying 'I will try again tomorrow.
Other Companies that Kept Going
Just like you, we understand that finding inspiration isn’t as simple as waiting for a spark, especially when you’re neck-deep in challenges. We often look to our peers in the industry for that burst of motivation, drawing lessons from both our rivals and the industry giants who’ve managed to navigate through tough times with resilience and innovation. Here are a few standout companies that have clawed their way back from debt and bad credit to emerge stronger and more creative than ever. If you’re in search of a dose of inspiration or are keen on learning from success stories, these companies’ journeys are worth exploring. Remember, their success didn’t happen overnight—they kept pushing the envelope, learning continuously, and hustling hard.
Walt Disney
Before establishing the Disney empire, Walt Disney encountered significant financial challenges. In 1923, his initial venture, Laugh-O-Gram Studio, went bankrupt owing to financial mismanagement and exorbitant production costs, leaving Disney mired in debt. Undeterred by this setback, Disney relocated to Hollywood where, with the assistance of his brother Roy O. Disney, he founded The Disney Brothers Studio. This enterprise laid the foundation for what would become the Walt Disney Company, a revolutionary force in the world of animation and entertainment. Disney’s persistence transformed him into an iconic figure, cementing his legacy as a symbol of success.
Ford Motor CEO Alan Mulally
Dave Ramsey
Get Better Credit Card Processing Rates For Your Bad Credit Merchant Account
Once you have established a history with the processing bank and solidified your finances, overcoming your difficult financial status you may be able to apply for an account with better terms elsewhere; however, ask the bank that initially approved you if they can review and improve the merchant account’s terms first. Because the bank was able to get you approved in the first place, it’s only fair turn to allow them an opportunity to keep your business after they stuck their neck out for you when no one else would.
Talk to the merchant account provider about your credit history before you apply in order to avoid being denied. Some merchant account providers will not work with a high-risk or a bad credit merchant, and you don’t want to waste your time simply to end up with no merchant account at all. Also, each time that you apply for a merchant account, an inquiry is lodged against your personal credit, which further reduces your credit score! The companies may have a specific high-risk department that handles high-risk accounts that you can speak with to determine your eligibility prior to applying for the account, or better yet, speak with an experienced account manager at Durango Merchant Services today!
Durango Merchant Services is here to help secure your Bad Credit Merchant Account
Frequently Asked Questions
What is a bad credit merchant account?
A merchant account for people with bad credit is a payment-processing account for businesses whose owners have low credit scores (typically below 600) or prior chargeback issues. Specialist high-risk processors approve these merchants but offset the extra risk with higher fees and a 5–10 % rolling reserve.
Can I still get a merchant account if my personal or business credit score is under 600?
Yes. High-risk processors such as Durango Merchant Services routinely place merchants with sub-prime scores by offsetting the extra risk with slightly higher rates or a rolling reserve.
How long does approval usually take for bad-credit merchants?
If your file is complete and chargebacks are already below 1 %, approvals typically arrive in 2–5 business days; tougher cases can stretch to two weeks.
Why is a rolling reserve required, and how big will it be?
Acquiring banks hold back 5 – 10 % of daily card volume—releasing each day’s reserve once it “ages out” after 90–180 days—to cover potential chargebacks or fines. In extreme cases reserves can be as high as $15%. This range is industry-standard for high-risk merchants.
How can I improve my approval odds and lower fees later on?
Keep chargebacks under 1 %, respond to retrieval requests within 24 hours, maintain positive balances, and update COAs or product labels annually. After 3–6 months of clean processing history, you can often negotiate lower discount rates or a smaller reserve.
What is the minimum credit score for a merchant account?
There’s no strict cutoff, but most standard processors prefer scores of 600–650 or higher. Merchants below that range can still be approved through high-risk providers, which offset the extra risk with higher fees and a rolling reserve.
