Credit review and scoring is important as a way to assess the merchant's ability to handle the risk associated with their type of business and the potential losses resulting from chargebacks and fraud.
In addition to good credit on the principal signers of the merchant account, complete documentation is required to satisfy bank-underwriting policies. You may know through your personal experience in dealing with bank services, from opening a checking account to getting a loan, that complete and accurate paperwork is required every step of the way. This is true for merchants applying for or switching credit card processing services. All processing companies work under basically the same guidelines and require the same information. While certain companies accept more marginal credit than others, it is not without a price to the merchant. Merchants should be extremely careful in dealing with any bankcard company that says they don't need any information, paperwork, or authorized signatures. In addition, merchants currently accepting bankcards have signed paperwork stating they understand and agree to obey the rules and regulations as set forth by the card associations.
Because of the ways in which the rules and regulations are written, most in the favor of the cardholder and issuing bank, there are large potential losses and risk taken by the acquiring financial institution. Credit approval is an important part of underwriting the merchant application. Chargebacks, merchant discount fees, and other costs incurred by merchants committing fraud, becoming a victim of fraud, or going out of business fall back directly on your processing company.
Personal credit is a determining factor of the approval process. The principals and owners who make the financial decisions for their business have control of the credit card processing. Their good credit is an indication of their business' good standing. Like all processing companies, we also require a personal guarantee. The guarantor is only responsible for paying, if the merchant does not, the discount and fees incurred for processing services as well as ensuring that for each transaction processed, that products and services will be delivered properly in accordance with the rules and regulations of the card associations. It is important to cover the necessity of good credit and work to satisfy bank requirements prior to submitting applications. The Vantage corporate support team will work with you to resolve any credit issue including notifications if a cosigner is required.