If your business falls into a high-risk industry such as Nutraceuticals, Document Preparation, CBD, Credit Repair, Moving Brokerage, Adult Entertainment, MOTO, etc., it’s extremely important that you keep your credit rating in good standing and your credit score as high as possible.
Poor credit history is one of the first things banks look at and judge harshly, when a business in a high-risk category is seeking a merchant account. In addition, a business’ credit history will continue to be a subject of interest to the banks even after your high-risk business has actually obtained your merchant account.
Being granted a merchant account is one thing. Keeping it is quite another and can be just as difficult if your business falls into a high-risk category.
Credit scores for businesses are calculated very differently from consumer scores and scales may vary widely from one credit reporting company to another.
For instance, Experian Intelliscore Plus and Dunn & Bradstreet Paydex are two of the most commonly used credit reporting companies for businesses and both utilize a scale of 1 to 100, wherein a credit score of 75 and up is considered good and lower risk.
However, the lower your score falls beneath 75, the higher risk banks will consider your company to be. Equifax, on the other hand, uses a very different ranking score ranging from 101 to 992, whereby a score of 550 or better is considered fair to good and a score below that places a company at a high-risk level for obtaining a merchant account from banks.
There are many steps any company can and should take to improve its credit standing. This becomes especially important if your company falls into a high-risk category for obtaining and keeping its merchant accounts. For instance:
As far as the banks are concerned, many industries are considered to be high-risk for obtaining merchant accounts for a wide variety of reasons.
There’s no way around that.
However, with the help of an experienced and knowledgeable high-risk merchant processing company such as us, First Card Payments, the more you can do to show that you’re running a reliable, responsible business with a decent credit history, the better able your business will be to obtain and keep your much needed merchant account.