Are you a small business owner interested in how you can get a merchant account so to start accepting credit cards? Well, you should be aware that your credit can greatly impact on whether you can get approved for credit card processing or not. This article will tell you about good and bad credit, as well as how you can get approved for a bad credit merchant account.
Your Credit Score Really Counts
The results given by different scoring systems may have slight differences. FICO (Fair Isaac Corporation) is a data analytics company based in San Jose, California focused on credit scoring services. FICO is the most commonly used model, and the FICO scores range between 300 to 850.
Your credit score is calculated based on several components. The components that affect your FICO score include:
- Payment history – 35% of total credit score
- Credit utilization – 30% of total credit score
- Length of credit history – 15% of total credit score
- New credit accounts – 10% of total credit score
- Mix of credit accounts – 10% of total credit score
Good credit scores are, of course, great for merchants as they allow business owners to get approved for merchant services without challenges. Good credit shows that you’ve been financially responsible in the past. The higher scores you have, the more opportunities you’ll find when trying to get approved both for a merchant account and for a business loan with favorable terms.
What about bad or poor credit scores? Bad business credit or poor personal credit scores can create lots of headaches for business owners. Traditional banks and many major merchant services providers prefer to shy away from merchants with bad credit. They often perceive them to be too high of a risk for chargebacks and fraud.
So, credit problems can make it rather difficult for you to start and run a business. Even if you find a merchant services provider that’s ready to work with you, you’ll be required to pay higher rates. Also, you’re likely to get an account that’s far away from being an individual one. The provider will make you use its own merchant account for collecting funds.
How to Get a Bad Credit Merchant Account?
Bad credit can have a major impact on your life. You might not be able to buy the car you want or obtain the devices or appliances you need. Also, you might have a difficult time updating your electronics, furniture, and many other things. Did you know you could even be denied a job because of your poor credit?
The same is also true of your business credit history. If it’s bad, you won’t be able to get approved for a line of credit easily. Moreover, it’ll be challenging for you to buy supplies or cover maintenance costs.
In addition, you may have problems with acquiring customers because of the bad credit of your company. The thing is that the number of people using credit cards to make payments is growing day by day.
The good news is that there’re reputable payment processors and business funding providers like FirstAmericanMerchant.com that specialize in high risk businesses. FAM has helped thousands of hard-to-approve merchants get a bad credit merchant account quickly and easily. Low credit scores and the lack of credit history can’t be a problem for FAM.
First American Merchant boasts an A+ rating with the BBB and is focused on serving high risk merchants of any type and size. All you need is to fill in a simple application form and provide the minimum of paperwork.
First American Merchant offers the lowest possible rates and the best terms in the industry. No worries about hidden fees. FAM guarantees instant approval for your merchant account. This means you can start processing credit cards in as soon as 24 hours of your application.