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Poor Personal Credit: How To Get a Merchant Account

Poor Personal Credit: How To Get a Merchant Account

Although your personal credit is one of the first things a financial institution looks at before granting you a merchant account for credit card processing, poor personal credit is not an automatic disqualifier. In all likelihood you will be able to obtain a “Bad Credit Merchant Account.”

You are a bad credit merchant if you are late when paying your credit accounts, have defaulted on loans or if you or your business declared bankruptcy. Liens and judgments filed against you or your company also will negatively affect your creditworthiness for a merchant account.

Bad credit merchants are included in the category of high risk merchants: high risk merchants may sell items that have a high rate of returns or chargebacks, and are industry specific, but anyone with poor personal credit is usually considered higher risk, regardless of what products/services they are providing.


To obtain the ability to process credit cards there are a few available avenues to check out:

  1. You could get a co-signer who has good credit; however if there is a chargeback or fees that are unpaid on your merchant account, the co-signer will be responsible to pay them.
  2. You can apply for lower monthly volume. As your merchant account vendor comes to know you over time, and see that your account is problem free, you will be able to increase the monthly volume.
  3. You can agree to a reserve, read here for more details on how a reserve on a merchant account works.

Your customers and peers will never know that you are considered high risk due to your personal credit, there isn’t a difference in the service you should receive from your merchant account provider.

The processing banks may however feel entitled to slightly higher fees as the risks they take on a merchant with poor credit history are greater than those merchants who have good credit history; similar to interest rates on a mortgage being dependent on your credit. The reason for this is that your personal credit is an indicator of your willingness or ability to repay debts that you cause, and its clear that all merchants carry the risk of causing a processing bank a loss.

As you build a history with your merchant account provider, you can petition to reduce your fees and/or reserve terms, given that your processing fees always clear (you do not return monthly fees or refunds NSF) and you do not have chargeback problems on your merchant account. Generally processing banks will need at least 3 months before considering improving terms, but 6 months is more typical.

If you are a business that has refrained from accepting credit cards because you have bad personal credit, Durango-Direct.com can help you get started with the most competitive bad credit merchant accounts available. Click below for a no-obligation free quote!

Are you a “Bad Credit Merchant” with a good processing history for the past 6 months and still cannot get more favorable rates? Durango-Direct.com should be able to lower your rates if this is the case. Click below to submit an inquiry for a risk free proposal!


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