Credit repair is a high-risk industry because it deals with customers who may not be able to make their payments on time or consistently. A credit repair payment processor also experiences a large number of chargebacks. This is because customers can dispute transactions. It may seem like an oxymoron, but credit repair is equivalent to a high-risk merchant account.
The business owner is not at risk, but the customers are considered to be at high risk. Those who enter this industry need a high-risk credit repair merchant account. When looking for a company that offers a high-risk merchant account for credit repair, it is important to find one that has specific programs designed to address the unique needs of credit repair services. This includes confirming customer authorizations for current and future charges, as well as confirming the identity of buyers.
It is also beneficial to have a merchant account that accepts electronic checks through a payment gateway, as this increases the chances of getting paid for services. It is important to note that even the most reliable credit repair services cannot do anything that cannot be done by the customer themselves. As with personal credit, it is possible to pay a credit repair company to settle business credit or do it yourself. Unfortunately, there are many complaints about credit repair services, such as misleading advertising, lack of information, unnecessary costs, hidden charges, and terrible customer service.
This has led traditional payment processors to consider credit card repair providers as high-risk and refrain from offering them merchant account services. A high-risk merchant account for credit repair allows online payments for these services with recurring billing options. It is important to remember that helping people repair their credit ratings can be risky, as companies may resort to harsh and unlawful practices to get customers to comply with regulations. The three main credit bureaus that maintain reports on company's credit are Dun and Bradstreet, Equifax and Experian.
According to the Consumer Financial Protection Office, more than 36% of complaints filed about credit repair services are due to scams or fraudulent cases. Unlike a personal credit report, if you reach an agreement with a creditor to settle a debt for less than the outstanding balance, you can have it removed from your business credit report. This is why it is important to have a high-risk merchant account for credit repair services. Most commercial service providers consider these companies as high-risk merchants, so it is best to assume that you will be listed as one and work from there.