Bad personal or business credit does not automatically prevent a UK business from getting a merchant account.
However, adverse credit can form part of the underwriting assessment carried out by an acquiring bank or payment provider.
This can include circumstances such as:
- personal or company County Court Judgments (CCJs);
- defaults;
- previous bankruptcy;
- individual voluntary arrangements;
- company insolvency history;
- poor business credit;
- director or owner credit issues;
- limited trading history; or
- other financial difficulties.
There is no single universal credit score that automatically determines whether a merchant account will be approved.
Providers can assess the complete business, including its financial position, ownership, sector, processing history, chargebacks, transaction values, fulfilment model and the type of payment facility being requested.
One provider may therefore decline a business that another provider is prepared to consider.
This guide explains how personal and business adverse credit can affect merchant-account applications, what providers may check and what businesses should understand before submitting an application.
Important: bad credit is not the same as MATCH or VMAS
Merchant Advice Service may be able to help where the issue is ordinary personal or business adverse credit, including circumstances such as CCJs, historic bankruptcy, an IVA or weaker company credit.
We do not provide a placement, removal or appeals service for businesses whose primary issue is an active Mastercard MATCH / MATCH Pro, Visa terminated-merchant or VMAS-related record.
An active terminated-merchant record can make obtaining another merchant account very difficult. Acquirers use card-scheme screening as part of merchant onboarding, and many providers will not consider an application where an active MATCH or equivalent terminated-merchant record is the primary issue.
If you believe you have been incorrectly listed, you should contact the acquiring bank or payment provider responsible for the original merchant account and ask them to explain the record and any review or correction process available.
What does bad credit mean when applying for a merchant account?
There is no single payments-industry definition of bad credit.
Providers may be interested in different types of financial information depending on the business and acquiring arrangement.
Business or company credit
This can include:
- company CCJs;
- late or missed payments;
- poor business credit history;
- previous insolvency;
- weak financial statements;
- negative net assets;
- limited cash reserves; or
- a newly incorporated company with little financial history.
Personal credit
Depending on the provider, legal structure and application, underwriting may also take account of information relating to directors, principal owners or beneficial owners.
This can be particularly relevant where the company itself is new and has little trading or financial history of its own.
Is a bad credit merchant account a different type of merchant account?
Not necessarily.
The phrase bad credit merchant account is commonly used to describe a merchant account obtained by a business or owner with adverse credit history.
It should not be interpreted as a completely separate card-processing product.
The underlying service is still a merchant acquiring arrangement that allows the business to accept card payments.
The difference is usually in the underwriting.
A provider may have greater appetite for businesses with:
- historic CCJs;
- previous insolvency;
- weaker financials;
- limited credit history;
- director credit problems; or
- other circumstances that fall outside another provider's standard criteria.
This is why provider fit matters more than simply searching for a product labelled “bad credit processing”.
Need a merchant account where ordinary credit history may be an issue?
If the issue is a personal CCJ, historic bankruptcy, IVA, company credit problem or other adverse credit, tell us about your business and payment requirements.
Merchant Advice Service can help you understand the requirement and identify merchant account providers whose underwriting appetite may be relevant.
This service is not intended for businesses seeking payment processing because of an active MATCH, VMAS or equivalent terminated-merchant listing.
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Can personal bad credit affect a business merchant account?
Potentially, yes, but it does not automatically mean the business will be declined.
This can be particularly relevant for directors and owners who have:
- personal CCJs;
- defaults;
- historic missed payments;
- an IVA;
- previous bankruptcy;
- financial difficulties connected with an earlier business; or
- a generally weak personal credit profile.
A limited company is a separate legal entity, but that does not mean payment providers always assess the company in isolation.
Depending on the provider, business structure and application, underwriting may include checks relating to:
- company credit history;
- company financial information;
- directors;
- principal owners;
- beneficial owners;
- previous companies connected with those individuals; and
- other information relevant to the provider's risk assessment.
This means there are two different questions:
Does the company itself have adverse credit?
and:
Does a director or owner have personal adverse credit?
Either can potentially be relevant, but providers do not all assess those circumstances in the same way.
What if the company is financially strong but a director has bad credit?
That can present a very different underwriting profile from a company that is itself financially weak.
An established company may be able to demonstrate:
- strong accounts;
- positive cash flow;
- several years trading;
- successful card-processing history;
- low chargebacks;
- stable ownership; and
- good current financial performance.
A provider can consider that wider information alongside the director's credit history.
Equally, a newly formed company with no trading or processing history gives the underwriter less company-level evidence on which to base the decision.
There is therefore no universal rule that says a director with poor personal credit automatically prevents their limited company from obtaining merchant services.
For the wider assessment, read our guide to merchant account underwriting and what payment providers check .
Can you get a merchant account with a CCJ?
A CCJ does not automatically mean every payment provider will decline an application.
The provider may want to understand:
- whether the CCJ relates to the company or an individual;
- the amount;
- when it was registered;
- whether it has been paid;
- whether there are several judgments;
- the circumstances behind it; and
- the current financial position of the business.
In England and Wales, a CCJ normally remains on the Register of Judgments, Orders and Fines for six years.
If it is paid in full within one month, it can be removed from the register. If paid later, it can normally be marked as satisfied while remaining visible for the remainder of the six-year period.
Businesses should disclose relevant credit issues accurately rather than assuming a provider will not identify them during underwriting.
Can someone with previous bankruptcy get a merchant account?
Previous bankruptcy does not automatically prevent every future merchant-account application.
However, the circumstances and timing are likely to matter.
Providers may distinguish between:
- an active bankruptcy;
- a recently discharged bankruptcy;
- a historic bankruptcy;
- the bankruptcy of a director;
- previous insolvency connected with another company; and
- the financial position of the current trading business.
The important point for a merchant application is to explain the current circumstances accurately rather than treating all historic insolvency as identical.
What about IVAs, defaults and other adverse credit?
Merchant underwriting can also identify other financial issues.
These might include:
- individual voluntary arrangements;
- defaults;
- debt-relief arrangements;
- historic missed payments;
- insolvency records; or
- financial difficulties connected with previous businesses.
UK credit-reference data can include public information such as CCJs and insolvency records alongside information about credit accounts.
There is no single universal merchant-account rule saying that one particular event automatically leads to rejection across every provider.
Can you get a merchant account with no credit check?
Businesses should be cautious about interpreting phrases such as “no credit check merchant account” or “guaranteed approval”.
A provider may place less weight on credit history than another provider, use a different credit-assessment process or be prepared to accept circumstances that another provider will not.
That is different from saying that no checks or underwriting take place.
Legitimate merchant onboarding can still involve:
- identity verification;
- company verification;
- director or principal information;
- ownership checks;
- business-model review;
- website checks;
- processing history;
- financial information;
- fraud and chargeback exposure; and
- other risk checks.
Bad credit accepted is not the same as no underwriting.
What credit score do you need for a merchant account?
There is no single UK merchant-account credit score that guarantees acceptance.
Different credit-reference agencies use different scoring systems, and payment providers have their own underwriting criteria.
The more useful questions are:
- What credit issue exists?
- How recent is it?
- Has it been resolved?
- Does it relate to the company or an individual?
- How financially strong is the business now?
- Does the company already have processing history?
- What exposure would the acquirer be taking on?
- Does the provider have appetite for the business?
Credit history is only one part of merchant underwriting
Credit can matter, but a provider may also assess:
- business sector;
- Merchant Category Code;
- monthly processing volume;
- average transaction value;
- maximum transaction value;
- customer geography;
- delivery times;
- future-delivery exposure;
- subscriptions;
- refunds;
- chargebacks;
- fraud;
- previous processing history;
- website and customer journey;
- ownership;
- regulatory status;
- financial strength; and
- technical payment requirements.
For the complete assessment, see what payment providers check during merchant-account underwriting .
Does bad credit automatically make a business high risk?
Not in isolation.
Financial strength is one component of merchant risk, but payment providers can also consider the business model, processing history, chargebacks, fulfilment, geography and other exposure.
Our High-Risk vs Low-Risk Merchant Accounts guide explains the wider factors that can affect merchant risk.
Businesses with more complex acquiring requirements can also visit our main High-Risk Merchant Accounts hub .
Will bad credit mean a rolling reserve?
Not automatically.
A reserve is a risk-management arrangement used by some payment providers in certain circumstances.
The decision can depend on the complete merchant profile rather than credit history alone.
Relevant factors can include:
- financial strength;
- refund exposure;
- chargebacks;
- future delivery;
- transaction values;
- processing history;
- sector;
- trading history; and
- the provider's own risk model.
If a provider proposes a reserve, establish:
- the percentage;
- how long funds are held;
- whether there is a cap;
- how money is released;
- whether the arrangement will be reviewed; and
- what could lead to the reserve being reduced.
Existing processing history can be particularly useful
If a business already accepts card payments successfully, recent processing statements can give a new provider evidence of actual payment performance.
They can demonstrate:
- monthly card turnover;
- transaction count;
- average transaction value;
- refunds;
- chargebacks;
- seasonality;
- currencies; and
- historic provider relationships.
Strong processing history does not erase adverse credit, but it gives the underwriter more information on which to assess the current business.
What if a merchant account application has already been declined?
Do not automatically submit the same application to several more providers.
First try to establish why the application failed.
The reason may have been credit history, but it could also relate to the business sector, provider risk appetite, financial information, future-delivery exposure, geography, processing history or another part of the application.
A decline from one provider does not prove that credit was the reason.
Before applying again, read what to do after a merchant-account application is declined .
What if the previous merchant account was terminated?
A terminated merchant facility is a separate issue from ordinary bad credit.
A previous provider may have closed an account for reasons including a change in risk appetite, business-model concerns, excessive disputes, compliance issues or other underwriting matters.
A termination also does not automatically mean that the business has been added to MATCH or another card-scheme screening system.
Keep the termination notice, provider correspondence, processing statements, chargeback information, details of any held funds and the reason given for closure.
See our guide to terminated merchant facilities before approaching another provider.
What are MATCH and VMAS?
MATCH and Visa terminated-merchant screening are different from ordinary credit checks.
Mastercard MATCH / MATCH Pro
Mastercard operates MATCH Pro to help acquiring financial institutions identify merchants and principal owners connected with previous merchant terminations that meet defined Mastercard criteria.
Acquirers are required to check MATCH Pro before entering into a merchant agreement.
If a match is identified, the information can form part of the acquirer's assessment of whether additional due diligence is required or whether it is prepared to establish a merchant relationship.
Visa VMAS and terminated-merchant screening
Merchants may also encounter the term VMAS, historically associated with Visa merchant-alert and terminated-merchant screening.
Visa currently provides merchant-screening services that allow acquirers to identify merchants or agents terminated by other acquirers and review termination information during underwriting.
Why is a MATCH or terminated-merchant record significant?
An active record can substantially restrict the number of providers prepared to consider a merchant application.
Many mainstream and specialist payment providers will not consider an application where an active MATCH or equivalent card-scheme terminated-merchant record is the primary issue.
This is very different from a business having a historic CCJ, director credit problem or weaker company credit profile.
A business owner could have excellent personal credit and strong company accounts but still have difficulty obtaining another merchant account because of a previous card-scheme termination record.
Can Merchant Advice Service help with MATCH or VMAS?
No. Merchant Advice Service does not provide MATCH or VMAS removal, appeal or dispute services.
We also do not provide a specialist merchant-account placement service where an active MATCH, VMAS or equivalent terminated-merchant record is the primary reason the business cannot obtain payment processing.
If you believe a listing is incorrect, you should contact the acquiring bank or payment provider responsible for the original merchant facility.
Mastercard's rules provide a process for a merchant to contact the acquirer that submitted a MATCH record regarding a request for removal. The decision and process sit with the relevant acquiring institution and card scheme, not Merchant Advice Service.
Please do not submit the MAS provider-matching form if your primary requirement is finding a processor that will accept an active MATCH, VMAS or equivalent terminated-merchant listing.
What should you prepare before applying with adverse credit?
If you know ordinary personal or business credit history may raise questions, it can be useful to prepare the explanation before an underwriter asks for it.
Useful information can include:
- company and ownership information;
- recent accounts;
- management accounts where relevant;
- bank statements;
- processing statements;
- monthly card volume;
- average transaction value;
- refund and chargeback history;
- details of the adverse-credit event;
- whether outstanding judgments have been satisfied;
- how old the issue is;
- what has changed since it occurred; and
- why the business is looking for a merchant account now.
The objective is not to hide the problem.
It is to give the provider enough context to assess the current business accurately.
What should businesses with adverse credit compare between providers?
Approval is only the first part of the decision.
Provider appetite
Has the provider understood the personal or business credit circumstances before the formal application is submitted?
Settlement
How quickly will processed funds reach the business?
Reserve
Will money be retained, how much and for how long?
Processing limits
Does the account support the expected monthly volume and individual transaction sizes?
Payment methods
Does the provider support online payments, face-to-face terminals, payment links, MOTO or recurring payments where required?
Pricing
Compare the complete cost rather than assuming that a specialist underwriting route automatically justifies any price offered.
Contract
Check contract length, notice periods, terminal agreements and exit costs.
Future review
If the financial position improves, ask whether pricing, reserves or other account conditions can be reviewed.
Credit problems do not tell the whole underwriting story
A personal CCJ, historic bankruptcy, IVA or weaker business credit profile may narrow the provider options, but it can be considered alongside the business's current processing, financial position and payment requirements.
Merchant Advice Service can help businesses with ordinary adverse-credit circumstances understand their payment requirements before approaching providers.
We cannot assist where an active MATCH, VMAS or equivalent card-scheme terminated-merchant record is the primary issue.
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Finding merchant account providers
Businesses can research providers directly, but the important question is not simply whether a provider advertises support for “bad credit”.
Establish whether the provider's underwriting route fits the business sector, credit circumstances, processing volume, transaction values, customer geography, payment channels and processing history.
You can explore merchant account providers through The Payments Directory®.
How Merchant Advice Service helps businesses with adverse credit
Merchant Advice Service does not carry out merchant underwriting and cannot guarantee approval.
Our role is to help businesses understand their payment requirements and identify payment providers whose underwriting appetite may be relevant.
Where ordinary personal or business credit history may be an issue, we can consider it alongside:
- personal credit issues;
- company credit issues;
- CCJs;
- historic bankruptcy or insolvency;
- IVAs;
- business sector;
- trading history;
- monthly card turnover;
- average transaction value;
- existing processing history;
- refunds and chargebacks;
- previous declines;
- settlement requirements;
- gateway requirements;
- card-machine requirements; and
- other factors that could affect provider fit.
The payment provider then completes its own checks, underwriting and approval process.
MAS does not provide provider matching, removal assistance or appeals for active MATCH, VMAS or equivalent card-scheme terminated-merchant records.
Find a merchant account that fits the complete business profile
If your issue is ordinary personal or business adverse credit, tell us about your business, payment volumes and anything that may affect underwriting.
We'll use that information to understand which types of merchant account provider may be worth considering.
Please do not enquire through this service if your primary issue is an active MATCH, VMAS or equivalent terminated-merchant listing.
Find suitable providers Explore merchant account providers
Editorial & Commercial Disclosure
This guide provides general information about merchant-account underwriting where a business, director or owner has adverse credit history.
There is no single universal merchant-account credit-score requirement. Individual providers determine their own underwriting criteria, credit assessment, commercial terms and risk appetite.
MATCH, Visa terminated-merchant screening and ordinary adverse credit are separate underwriting issues.
Merchant Advice Service does not carry out credit checks, make merchant-account underwriting decisions or guarantee account approval.
MAS does not provide MATCH, VMAS or other card-scheme terminated-merchant record removal, appeal or dispute services and does not provide provider matching where such a record is the primary barrier to obtaining payment processing.
MAS is an independent payments information and provider-matching service. MAS may receive a referral fee or commission from some payment providers where a business proceeds following an introduction. Commercial relationships do not determine the factual information or provider-selection principles contained within this guide.
References to CCJs, insolvency, credit records and card-scheme merchant-screening systems are general information and should not be treated as legal, insolvency or financial advice.
Final approval, pricing, reserves, settlement and contractual terms remain the responsibility of the relevant payment provider.
