Personal Credit Card

A Merchant account is a line of credit so it's not surprising that a principal's personal credit standing is an important concern during the application process. While credit is a key factor in the merchant account application, it doesn't have the same effect as it would on a conventional line of credit or loan application. And you were about to spend the money anyway, even without the rewards. So it really is free money.

With such accounts, the owner’s personal credit standing will affect the application process in one of three ways. If the principal's record is very poor, the merchant account application will likely be declined. If the owner’s credit standing is marginal, the merchant account may be approved if the merchant agrees to conditions such as a rolling reserve or an ACH delay. If the principal's credit score is good, the account will be accepted so long as all other details are in order.

Personal credit largely impacts a merchant account during the application process where it's measured with other criteria to calculate the risk associated with a new account. After the application process is complete, processing action is used to measure risk associated with an account. Personal credit does not influence the rates and fees of a merchant account. A merchant with excellent credit would get an account with the same rates and fees as a merchant with weak credit; assuming the merchant with weak credit is approved.

Personal credit standing will not cause you to lose a merchant account that you already have. Once you get an account and start processing credit cards, processors use your history as a benchmark, not the principal's personal credit status.

While personal loans doesn't directly impact the rates and fees of a merchant account, it can indirectly impact the general cost and operation of the account if a rolling reserve or ACH delay is required due to weak credit. If a the personal credit of the principal owner on a merchant account has weak credit a processor may require an ACH delay or rolling reserve in order to mitigate the higher perceived risk of the account due to the principal's credit standing.

When you're choosing providers and applying for a merchant account, be honest about your personal credit standing, even if you don't have the best score. While choosing providers, being upfront about your credit status will ensure that you don't waste time taking into consideration providers that may not be able to get you approved. Processors have unstable credit tolerances.

If bad credit history is stopping you from getting a merchant account there are things that you can do to get around the credit obstacle. The first and most accepted way of getting a merchant account with poor credit is to have someone with better credit act as a co-applicant on the merchant account. In this case the processor will consider the personal credit of the co-applicant on the merchant account application instead of the personal credit of the principal and grant you the account.

Setup a credit card processing merchant accounts to accept credit cards today!