Does my personal credit affect my merchant account rates?

I was often asked this question throughout my years of selling merchant services and I was always quick to say that your personal credit score does not affect your merchant account rates. *Technically* this is the correct answer, after all, someone with a personal credit score of 800 *will* receive the same discount rates as a person with a personal credit standing of 500. The problem is that the person with a credit score of 500 may not get a merchant account at all, and if they do it will probably have stipulations like an ACH delay or a rolling reserve.

ACH delays, rolling reserves and other possible merchant account stipulations are a separate issue from the discount rates of a merchant account but they do cost money, whether directly or indirectly, and they can be and often are put in place as a result of the personal credit standing of the personal applying for a merchant account. These stipulations are another topic all by themselves and a lot of info can be found by following the links above.

The good news is that a merchant service provider will have to notify you of any of these account stipulations prior to finalizing your account. If the terms are unacceptable you can choose to hunt for an account elsewhere.

Summary:
A merchant's personal credit score does not directly affect the discount rates of an account, however, it may affect the type of processor  willing to underwrite the account and higher risk processors will have higher discount rates.

A lower personal credit score will also increase the likelihood that a merchant account will carry ACH delays, rolling reserves and other account stipulations that lead to increased costs unassociated with discount rates.

Questions & Comments