If you want to process cc’s using a terminal the merchant bank will do a credit check. If you prefer to use an online 3rd party service their guidelines are far less stringent…however their fees are somewhat higher.
I have recently been researching merchant accounts in my attempt to obtain one. I have found that they DO check personal credit. However, the credit they check does not have to be yours. If you have another officer of your company who has good credit, you can obtain the account using that person’s credit. Typically, that officer will have to own 49% to 51% of the company (on paper) for them to consider running that person’s credit.
I had a friend recently that had the same problem you are facing. He just made me an officer of his company, and we agreed that I own 49% of his company for a one year duration. We used my credit to obtain his merchant account. In one year I will not own any of his company and he will still have his merchant account.
Here is the danger for me. If, for some unknown reason, he ends up owing the merchant company money when he closes the account and does not pay it off, I am responsible for paying back that money. However, since I know the risk is extremely low, I went ahead and did this for my friend. (It should be noted that if this same friend of mine came to me asking to co-sign a personal loan for him, I would not as the risk is too high.)
If you are creative, you can always find a way around the rules and regulations. (Just don’t break any laws, as you WILL go to prison.)
I hope I have been of some help. If you have any further questions regarding this or any other credit related question please feel free to contact me at
Yes, merchant account providers check every applicant’s personal credit history, however, your bad credit should not prevent you from getting processing services.
First of all, let me strongly advise you against adding a co-owner exclusively for the purpose of using his or her credit history during the application process. It will create more problems than it will solve. The first issue has to do with trust and for most people adding a relative or a close friend takes care of that. But what happens if something goes wrong? Unfortunately, in business thing can and do go wrong more often than not and a co-owner is fully responsible for everything that happens. The potential of harming your relationship with a trusted friend/relative is enormous.
My advice is to apply for a merchant account and provide all required information. Unless you’ve had a bankruptcy during the last seven years, you should be able to obtain payment processing services. Keep in mind that, with the right processing provider, your bad credit will not affect your rates. As long as you get approved, you should get the same rates anyone else gets. The difference in your case is that you may be required to keep a reserve. Reserve is a portion of the monthly revenue from a merchant’s payment card transactions that a merchant account provider may request to hold in an escrow account as an insurance against possible loss from chargebacks and other sources. Used mainly with high-risk merchants, upon satisfactory completion of a predetermined period, reserves are returned to the merchants. In the case of a rolling reserve, a reserve is held every month for a certain period (usually six months). On the following month the first month’s reserve is released to the merchant, and then the second month’s reserve and so on until there is no longer a reserve.
To conclude, your situation is by no means desperate and does not call for desperate measures. Go ahead with the application and it might turn out that it is much easier than you feared.
Comments on To get a merchant account, do they check your personal credit?
Yes, of course they will check your personal credit. They don’t want to lend money to people who are poor at managing it.
If you do get approved, you’ll probably have a tiny credit limit.
If you want to process cc’s using a terminal the merchant bank will do a credit check. If you prefer to use an online 3rd party service their guidelines are far less stringent…however their fees are somewhat higher.
Yes, they do. There is a merchant that accounts bad credit in a lot of cases and still keeps low rates at.
I have recently been researching merchant accounts in my attempt to obtain one. I have found that they DO check personal credit. However, the credit they check does not have to be yours. If you have another officer of your company who has good credit, you can obtain the account using that person’s credit. Typically, that officer will have to own 49% to 51% of the company (on paper) for them to consider running that person’s credit.
I had a friend recently that had the same problem you are facing. He just made me an officer of his company, and we agreed that I own 49% of his company for a one year duration. We used my credit to obtain his merchant account. In one year I will not own any of his company and he will still have his merchant account.
Here is the danger for me. If, for some unknown reason, he ends up owing the merchant company money when he closes the account and does not pay it off, I am responsible for paying back that money. However, since I know the risk is extremely low, I went ahead and did this for my friend. (It should be noted that if this same friend of mine came to me asking to co-sign a personal loan for him, I would not as the risk is too high.)
If you are creative, you can always find a way around the rules and regulations. (Just don’t break any laws, as you WILL go to prison.)
I hope I have been of some help. If you have any further questions regarding this or any other credit related question please feel free to contact me at
Yes, merchant account providers check every applicant’s personal credit history, however, your bad credit should not prevent you from getting processing services.
First of all, let me strongly advise you against adding a co-owner exclusively for the purpose of using his or her credit history during the application process. It will create more problems than it will solve. The first issue has to do with trust and for most people adding a relative or a close friend takes care of that. But what happens if something goes wrong? Unfortunately, in business thing can and do go wrong more often than not and a co-owner is fully responsible for everything that happens. The potential of harming your relationship with a trusted friend/relative is enormous.
My advice is to apply for a merchant account and provide all required information. Unless you’ve had a bankruptcy during the last seven years, you should be able to obtain payment processing services. Keep in mind that, with the right processing provider, your bad credit will not affect your rates. As long as you get approved, you should get the same rates anyone else gets. The difference in your case is that you may be required to keep a reserve. Reserve is a portion of the monthly revenue from a merchant’s payment card transactions that a merchant account provider may request to hold in an escrow account as an insurance against possible loss from chargebacks and other sources. Used mainly with high-risk merchants, upon satisfactory completion of a predetermined period, reserves are returned to the merchants. In the case of a rolling reserve, a reserve is held every month for a certain period (usually six months). On the following month the first month’s reserve is released to the merchant, and then the second month’s reserve and so on until there is no longer a reserve.
To conclude, your situation is by no means desperate and does not call for desperate measures. Go ahead with the application and it might turn out that it is much easier than you feared.