Merchant Account for Credit Repair

Credit Repair Merchant Account & Payment Processing

How Did Credit Repair Companies Become High Risk Merchants?

In the aftermath of the financial downturn starting in 2008, countless individuals and businesses found their credit scores in dire straits, making it difficult for them to secure any type of loan, rent housing, or even be hired for jobs. Sensing a need, the credit repair industry blossomed. However, alongside the legitimate businesses seeking to help people, numerous scam artists also came out of the woodwork to prey on the vulnerable. Largely because of these fraudsters, payment processing institutions now view credit repair merchant accounts as high-risk propositions – leaving honest entrepreneurs who genuinely want to help people with their credit problems to face higher fees, more restrictions, and a more difficult approval process. Durango merchant services are experts in securing a merchant account for credit repair companies.

Who is Durango Merchant Services?

Durango Merchant Services is a specialized payment processing company that caters primarily to businesses considered to be high-risk. This includes industries that traditional banks and payment processors might avoid, such as credit repair, herbal supplements, travel agencies, subscription, ecommerce and many others. Founded in 1997, our mission is to support businesses facing challenges in securing reliable payment solutions, we offer a range of services tailored to these unique needs.

What Sets Durango Merchant Services Apart from the Rest?

Why are Credit Repair Companies Considered High Risk?

Challenges and Opportunities in Securing a Merchant Account for Credit Repair Companies

Credit repair companies are considered high-risk by banks and payment processors for a number of reasons, each contributing to the perception and reality of risk associated with this industry. Understanding these reasons can help business owners navigate the challenges and opportunities in the credit repair sector. Here are the main challenges for securing a merchant account for credit repair companies and ways to mitigate them so your company can focus on and thrive in the opportunities:

Challenge 1: Regulatory Scrutiny

Credit repair companies operate under strict regulatory environments, such as the Credit Repair Organizations Act (CROA) in the United States, which imposes stringent guidelines on how these businesses can operate and market their services. The high level of regulatory scrutiny increases the risk of non-compliance and potential legal issues, making banks and payment processors wary of associating with businesses that may face legal challenges.

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Opportunity

Durango Merchant Services can help you overcome this by being a first line of inquiry, helping to reinforce the importance of regulatory compliance to improve your chances merchant service approval and act as a reminder that slipping on compliance can negatively affect your ability to continue to process credit card payments.

Challenge 2: High Chargeback Rates

It’s pretty common in the credit repair industry to see more chargebacks than usual. Basically, chargebacks happen when your clients aren’t happy with what they received, or it wasn’t quite what they were promised, so they dispute the charge on their credit card. This is a big headache for payment processors and banks because too many chargebacks can mean penalties from the credit card companies and higher fees to deal with. Not to mention the lost revenue.

Strategy Chess
Opportunity

Durango Merchant Services account managers are experts in the strategies, tools and technologies to manage and mitigate chargeback rates. Our gateway has cutting edge tools that allow you to easily track and respond to chargeback claims coupled with fraud prevention measures. Your experienced account manager can help coach you on steps to take to help decrease chargebacks on your account.

Challenge 3. Reputation Risks

The credit repair industry, unfortunately, has been marred by the actions of fraudulent or unethical companies that have taken advantage of consumers. This has led to a general skepticism and caution from financial institutions about the industry as a whole. Even legitimate and ethical credit repair companies can be painted with the same broad brush as the fraudsters, making it challenging to establish banking relationships and securing a merchant account for credit repair companies.

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Opportunity

We have spent decades servicing thousands of merchants and have strong relationships with banks that trust we will do our best to bring credible businesses to their door. We strive to pass that trust to our clients and help them prepare for the inevitable skepticism banks may have. Everyday we wake up we have the opportunity to do some good. The more ethical your business, the more it contributes to the credit repair industry recovering it's initial reputation for helping people find financial security.

Challenge 4. Financial Stability Concerns

Credit repair companies often face unpredictable business volumes and revenue fluctuations, partly due to the nature of their services and the variability in demand. This financial instability can be a red flag for banks and payment processors, who prefer to work with businesses that show consistent and predictable financial performance.

Strategy Chess
Opportunity

Our experts can't dictate the course of the credit repair market, but we can help you prepare for it so that banks are more willing to approve you for payment processing. Businesses are often built over many years, so the more you get to focus on getting new clients, with the confidence the rug won't be pulled out from under you, the more time you can spend on marketing and outstanding service.

Is there good news for credit repair payment processing, then?

Creating good news for our clients is why we exist. As long as you keep in mind a couple of critical points, it’s still very possible to obtain a credit repair merchant account. What should you remember?

  1. The credit repair industry is what it is. Financial institutions that offer payment processing accounts for credit repair businesses are not going to change their minds overnight about the risks involved. A bunch of scammers promised the moon to a lot of desperate people and took thousands of dollars out of the pockets of those who could least afford it. You’re in this business to offer people real help, but you’re still operating within the industry as it currently stands. Similarly…
  2. Your credit repair business is what IT is. Don’t try to sugar-coat your business model or be indirect about the services you offer when you submit an application for a payment processing account. Also, be very wary of any merchant account provider who claims to be able to guarantee you a low rate for your credit repair card processing account – it’s likely that they intend to be less than honest with the financial institutions involved when it comes to the nature of your business. The problem is, this isn’t the sort of secret that keeps itself very well. All it takes is one random transaction audit – which is a common occurrence – and the bank figures out what kind of service you really provide. What happens then?

Your account gets shut down. If there are any transactions that you haven’t received payment for yet, expect that to be held up for at least six months. If you’re lucky, it ends there – but more likely, you’d find yourself on an industry blacklist for merchant account providers, which would make it next to impossible for you to open up a merchant account for any sort of business in the future. In short, it’s a really bad idea to try to pretend your business is something it’s not. We have experience and knowledge to help you have the best chances of obtaining a merchant account for credit repair companies, including yours.

Table of Contents

Typical prices for credit repair merchant accounts:

Typical Terms in a Credit Card Processing contract:

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Dive Deeper Into Payment Processing for Credit Repair Companies

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How Do I Open a Credit Repair Merchant Account?

Durango Merchant Services has created a detailed and digestible guide to help our potential clients understand and prepare for what to expect when trying to get approved to process credit card in the credit repair industry. As always our sales team and account managers are experts in all things payments and are here to help guide and clarify the process.

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How Do I Integrate Durango Pay Gateway into My Business?

Durango Pay Gateway is truly a modern marvel. If you can think of it, it can likely be done. Some of the features include integration with more than 150 shopping carts from woocommerce to shopify. Our gateway is omni-channel ready out of the box, boasts powerful fraud detection and prevention tools, and chargeback management features.

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How do I increase my credit card processing limits?

Looking to increase your credit card processing limits? Here’s how it’s done: show off a solid history of steady and reliable transactions, and make sure your business finances are in great shape. Keeping those chargebacks to a minimum and increasing your bank balance can really help paint your business in a good light to the folks handling your transactions. We invite you to talk openly with your account manager about your growth plans—it could help you negotiate better terms.

Some people want it to happen, some wish it would happen, others make it happen.

Other Companies that Kept Going

If you are like us, you know that inspiration doesn’t always come out of thin air, especially when you are actively overcoming obstacles. We derive a lot of inspiration from other companies in our industry, both from a competitive perspective and admiring what the “Big Dogs” do right. Here are a few companies in the credit repair industry that have proven resilient and innovative. If you would like a little inspiration yourself or are curious about case studies in success, then dive into these companies stories and remember that they didn’t just become successful, they never stopped learning and never stopped hustling.

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Lexington Law

 Lexington Law is one of the oldest and most well-established credit repair companies in the United States. It was founded by a group of lawyers and credit experts who aimed to help consumers navigate the complex world of credit reporting and repair. Over the years, Lexington Law has grown to become one of the largest and most trusted names in credit repair, having served over half a million clients. The firm prides itself on utilizing legal expertise to help clients challenge inaccurate and unfair negative items on their credit reports.

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CreditRepair.com

CreditRepair.com started its operations with the goal of providing technology-driven credit repair services. They distinguish themselves by offering an innovative digital experience that includes personal online dashboards, credit score tracking, and analysis. CreditRepair.com has positioned itself as a company focused on empowering individuals to achieve their credit goals through education and personalized credit repair services. Their approach involves not just removing negative items from credit reports but also educating clients on how to maintain and build their credit for future financial health.

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Sky Blue Credit

Sky Blue Credit is among the pioneers in the credit repair industry, with a long-standing reputation for offering straightforward and effective credit repair services. The company was established with the mission to simplify the credit repair process for consumers, providing a clear and effective approach to fixing credit scores. Sky Blue Credit has built its reputation on trust, reliability, and a customer-first approach, offering personalized credit repair advice, a simple pricing model, and a satisfaction guarantee. Their services include disputing inaccuracies on credit reports, providing personalized credit score advice, and tools to help clients manage their credit more effectively.

What should you do to help secure a Credit Repair Merchant Account?

You need to find a merchant account provider who is willing to work with businesses in high-risk industries like yours. You won’t find rates as beneficial for credit repair payment processing accounts as you might for merchant accounts in other types of businesses, but that’s simply because you’re operating in an environment where everyone has to be a little more careful. Over time, if you maintain low rates of chargebacks and other account issues, you may be able to prove to your credit repair merchant account provider that your company isn’t as much of a risk as some of your industry peers, and with some help, you may be able to adjust the terms of your merchant account to be less onerous. However – very much like you probably advise your credit repair clients – it will take some time and careful management before you see a real difference.

 

International Options for Credit Repair Merchant Accounts:

Durango Merchant Services works with several gateway processors and suppliers with sponsor banking relationships that provide both US based national and international credit card processing solutions. We can provide credit repair merchant accounts in the European Union, United Kingdom, Canada, US & UK Territories as well as Puerto Rico.

Additional benefits of our payment processing service for credit repair businesses:

If you get approved for a merchant account for credit repair company with Durango Merchant Services, then you will also be eligible for other benefits that we offer, we can set you up with electronic commerce and recurring billing via our online portal. Businesses can receive the following additional benefits:

Durango Merchant Services is here to help secure your Credit Repair Merchant Account:

Our dedicated team has negotiated on behalf of more than 35,000 clients.  We understand the back and forth and give and take of negotiating processing accounts for high risk merchants, including hundreds of credit repair merchant accounts.

We know that there aren’t always easy answers. But remember, there is almost always a way forward and if you can make it through the first 3 years with a good track record, life will become much easier and your business will be better for it. Read our guide to how to apply for a credit repair merchant account below.

How to Apply for Credit Repair Merchant Services?

Applying for credit repair merchant services, given the high-risk status of the credit repair industry, requires careful preparation and attention to detail. Here’s a step-by-step guide to increase your chances of approval:

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Estimated Time Needed: 3 days
Total Cost: 0 USD

Required Documents:

-> Business license and registration documents.
-> Personal identification for all business owners (e.g., passport, driver's license).
-> Articles of Incorporation or similar legal documents.
-> Federal Employer Identification Number (EIN).
-> Detailed business plan, including marketing strategies, billing models, and compliance with the Credit Repair Organizations Act (CROA) and other relevant regulations.
-> Financial statements (profit and loss statement, balance sheet).
-> Bank statements, typically from the last three to six months.
-> Any previous merchant account statements, if available, to demonstrate your chargeback history and sales volume.

Ensure Regulatory Compliance

-> Full compliance with industry regulations, such as the CROA in the United States.
-> Website Compliance to national ecommerce standards.

Detailed Roadmap for Opening a Credit Repair Merchant Account:

Step 1: Research Specialized Payment Processors
Identify Processors: Start by identifying payment processors, like Durango Merchant Services, that specialize in high-risk merchant accounts and have experience with credit repair businesses. Durango Merchant Services has the expertise and experience to help you understand the specific challenges and regulatory requirements of the industry. Contact us by filling out a form or giving us a call and we can get you started on the path to accepting credit cards.
Step 2: Prepare Your Business Documentation
Gather and prepare the required documents that most payment processors will require, including but not limited to:

-> Business license and registration documents.
-> Personal identification for all business owners (e.g., passport, driver's license).
-> Articles of Incorporation or similar legal documents.
-> Federal Employer Identification Number (EIN).
-> Detailed business plan, including marketing strategies, billing models, and compliance with the Credit Repair Organizations Act (CROA) and other relevant regulations.
->Financial statements (profit and loss statement, balance sheet).
->Bank statements, typically from the last three to six months.
->Any previous merchant account statements, if available, to demonstrate your chargeback history and sales volume.
Step 3: Ensure Regulatory Compliance
Compliance: Make sure your business practices are in full compliance with industry regulations, such as the CROA in the United States. This includes ensuring transparent advertising, fair billing practices, and proper client agreements.

Website Compliance: Ensure your website includes clear service descriptions, terms and conditions, privacy policy, refund policy, and contact information. Payment processors will review your website for compliance and transparency.
Step 4: Implement Chargeback Prevention Strategies
One of the major reasons credit repair companies are labeled high risk merchants is because of high chargeback rates, so it is crucial to develop and implement strategies to minimize chargebacks, such as clear communication of your services, easy cancellation policies, and prompt customer service. If you are unsure of how to develop a chargeback prevention strategy, Durango Merchant Services account managers all have a decade or more of experience working with credit repair merchants just like yourself to develop robust chargeback prevention strategies that will help secure underwriting for your payment processing needs.
Step 5: Submit Your Application
Durango Merchant Services experienced, courteous and knowledgable account managers will help guide you through putting together all the necessary documentation so we can improve your approval chances once you submit your application. Our experts will help you get your ducks in a row to develop a thorough and accurate application that improves your chances of securing credit card processing capabilities with minimal delays.

Don’t forget to prepare and include any supporting documentation that demonstrates your business’s financial stability, compliance with regulations, and strategies for minimizing chargebacks. We are always here to help you understand what these are and the gold standard for preparation.
Step 6: Undergo the Underwriting Process
Review Process: Durango Merchant Services will review your application and documentation during the underwriting process. This may include a review of your financials, business model, compliance with credit repair regulations, and operational practices.

Be Responsive: In some cases, our representatives may ask you to provide additional information or clarification. The faster and more thoroughly you respond to our requests quicker we can begin to negotiate with banks to secure credit card processing for your business.
Step 7: Negotiate Terms and Setup
If approved, you’ll receive an offer with the terms for your merchant account, including fees and any reserves that may be required. Review these terms carefully and negotiate if possible.

Once terms are agreed upon, you’ll proceed with setting up your merchant account and integrating payment processing into your business operations.
Step 8: Negotiate Terms and Setup
If approved, you’ll receive an offer with the terms for your merchant account, including fees and any reserves that may be required. Review these terms carefully and negotiate if possible.

Once terms are agreed upon, you’ll proceed with setting up your merchant account and integrating payment processing into your business operations.
Step 9: Maintain Compliance and Monitor Chargebacks
After securing merchant services, continue to monitor your business practices for compliance and keep an eye on chargeback rates. Our account managers are fountains of knowledge and we encourage you to work with them to make sure your chargeback management plan is effective. Maintaining a good relationship with your payment processor is crucial for the ongoing success of your account.

Frequently Asked Questions (FAQ)

Getting a merchant account for a credit repair business is challenging due to the industry's perceived high risk by banks and payment processors. Several factors contribute to the difficulty, including regulatory scrutiny, reputational concerns, high chargeback rates, and the potential for legal issues.

The application and underwriting process for obtaining a merchant account for a credit repair business involves several steps, designed to assess the risk associated with providing payment processing services to the business. Given the credit repair industry's high-risk status, the process is thorough, with a focus on regulatory compliance, business legitimacy, financial stability, and operational practices.

A credit repair merchant account is a specialized type of bank account that allows credit repair businesses to process electronic payment transactions, particularly credit and debit card payments. Given the nature of credit repair services and the industry's classification as high-risk by financial institutions and payment processors, these merchant accounts are tailored to meet the specific needs and challenges associated with credit repair businesses.

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