The credit repair industry has remarkable potential and a fantastic business model. This industry can help people recover from poor financial decisions and planning, allowing them to remedy poor credit or bad credit, increase their credit scores, and prepare for their financial future.

That being said, the business is unique in many ways, as it often deals with individuals who have financial difficulties and are unable to manage basic financial operations, whether for themselves, their family members, or their businesses. A sad irony is the result: Credit businesses seek to help others recover, but they are often unable to obtain affordable merchant accounts that allow them to do business and process payments.

Not being able to access these critical services means that businesses will struggle to expand or even succeed. As such, you have to make sure that you are working with a merchant account with decades of experience working with merchants to help them manage their needs and gain access to the financial services they deserve. The unique challenge of this industry necessitates finding ACH processing software that can help you address these issues and properly execute your payment processing.

As a credit repair business, you have unique needs. We'll work with you to find merchant services to help you grow, no matter which sector of the industry you're in.

  • Cease and desist collections processing
  • Credit re-establishment
  • Credit repair consultation
  • Settlement assistance firms

The Risks Facing the Credit Repair Business

Credit repair is a multibillion-dollar industry, one that has spawned an entire array of businesses that are genuinely dedicated to helping individuals, business owners, startups, and small businesses repair their credit to survive and thrive in today's economy. All of this can lead to credit repair companies being classified as “ businesses.” This, in turn, can make finding a merchant services vendor even more challenging. These businesses run the gamut of services.

Examples include:

  • Collections processing within the cease-and-desist space, working with businesses to help them obtain relief from aggressive collections agencies.
  • Re-establishing credit after a financial disaster, a series of poor decisions, or another negative life event.
  • Consultation on a variety of credit repair services, including assisting individuals in enrolling in the right services that can help them re-establish their credit.
  • Working with settlement assistance firms to help obtain relief from a financial judgment or collect a judgment they are owed.

The provision of these financial services can be risky for the vendors that are involved in collecting payments. Many of these risks are related to chargebacks. These are specific fees that occur when someone disputes or otherwise returns a credit card payment. As a vendor, your business not only loses the money but is often charged an additional fee from the vendor or merchant account processor since it involves additional work on their end. This can result in serious lost revenue.

These chargeback fees make up a vital component of the risk that credit repair businesses often face. For example, the services provided by these businesses are high ticket and involve recurring billing plans. All of this increases the chances of incurring one of these fees and loss to all parties involved. Since individuals who use credit repair services are often cash strapped, they are more likely to lie about certain charges, falsely disputing them, and thus also resulting in additional fees.

Of course, these fees are not the only source of risk to these businesses. Fraud is a problem as well. In many cases, these businesses will take payment via an online portal rather than a mobile device or another form of in-person payment. This increases the chances of fraud, which increases the odds of a payment needing to be returned.

What This Mean For Your Credit Repair Business

This can result in a significant problem for your business and credit repair merchant account. The chief problem is painfully obvious: You may have a hard time obtaining a merchant account, or you may have a difficult time obtaining merchant account services that are affordable.

This may result in you losing a significant chunk of your revenue to credit card processing, cutting into your already thin margins. If you are unable to obtain the appropriate merchant services, it may force you to rely on less-than-ideal methods of completing financial transactions, like cash. This, in turn, can limit your legitimacy with your customers. It can also force you into a position where you have to turn away perfectly valid payment methods, like internet-based transfers.

In this day and age, this is an unacceptable problem for businesses to have to deal with. All of this is ultimately tied back to the exact cause: A credit repair merchant account is considered part of a industry. As such, you must try and find ways to mitigate these risks. This means finding a vendor who is used to your industry and can handle your needs.

How Can You Mitigate These Risks?

To be clear, there are ways you can mitigate these risks. Even the most vendor can mitigate these risks by engaging in appropriate risk reduction strategies, such as developing a comprehensive plan to reduce chargebacks and working with a vendor to identify ways to reduce these risks. Furthermore, a credit repair merchant can help you identify the source of chargebacks, reduce fraudulent charges, and develop other ways to lower your transaction fees. However, fundamentally, a credit repair merchant account will always have risks that are simply inherent to the industry. As such, you will have to work with a vendor that fully understands your industry and your line of work.

In terms of potential merchant account services, you must find a merchant who mitigates risk. This means finding a merchant account provider who has worked with credit repair services and knows how to mitigate your risks while charging you a fair price.