Can You Get a Merchant Account with a 590 Score?

The global economy is a landscape of constant flux, shaped by pandemics, supply chain disruptions, and the looming specter of inflation. In this turbulent environment, the dream of entrepreneurship burns brighter than ever. People are launching side hustles, turning passions into professions, and seeking financial independence. But for many, a single, stubborn number stands as a formidable gatekeeper: a 590 credit score. This score, sitting squarely in the "Poor" range according to FICO models, can feel like a life sentence, especially when your business idea requires the ability to accept credit and debit card payments. The question echoes in the minds of countless aspiring business owners: Is the door to a merchant account completely locked for me?

The short, direct answer is a surprising and hopeful one: Yes, it is possible to get a merchant account with a 590 score. However, the path is not the same as it would be for someone with pristine credit. It's a journey that requires understanding the "why" behind the scrutiny, knowing where to look, and being prepared for a different set of terms. It’s about moving from a mindset of "if" to a strategy of "how."

Why Your Personal Credit Score Matters for Your Business

At first glance, it might seem unfair. You're building a business, a separate legal entity, so why should your personal financial missteps from years ago matter? The reasoning, from the perspective of a merchant account provider, is rooted in risk assessment.

The Risk Management Equation

Payment processors and acquiring banks are in the business of managing risk. When they underwrite a new merchant account, they are essentially lending you their ability to process card transactions. They need to be confident that you will operate ethically, deliver on your promises, and not expose them to financial loss. For new or small businesses, especially sole proprietorships and LLCs without a long credit history, the owner's personal credit score is one of the most accessible indicators of financial responsibility. A low score suggests a higher statistical probability of behaviors that are red flags for processors, such as:

• Chargebacks: A customer disputes a charge, and the money is forcibly taken back from you. High chargeback ratios are a processor's nightmare.
• Merchant Collapse: The business fails abruptly, potentially leaving unresolved transactions and liabilities.
• Fraud: Intentional or otherwise, fraudulent activity is a major liability.

In a world still recovering from economic shocks, financial institutions have become even more cautious. Your 590 score signals potential instability, prompting them to look deeper or impose safeguards.

The Modern Landscape: High-Risk Merchant Accounts

This is where the concept of a "High-Risk Merchant Account" becomes central to your quest. Not all merchant account providers are created equal. While traditional banks and mainstream processors like Stripe or PayPal Standard might automatically decline an application with a 590 score, a specialized sector of the payment industry exists precisely to serve businesses considered higher risk.

What Makes a Business "High-Risk"?

Your credit score is just one factor. The industry you operate in plays a massive role. Even with a great score, you might be classified as high-risk if your business falls into certain categories that are statistically prone to more chargebacks or regulatory scrutiny. These include:

• CBD and Hemp Products: A booming industry but one with a complex and evolving legal landscape.
• E-cigarettes and Vaping Supplies: Facing increased regulation and age verification challenges.
• Travel and Subscription Services: Prone to future-service disputes and recurring billing issues.
• Telemedicine and Online Pharmacies: Heavily regulated with a high bar for compliance.
• Tech Support and Fantasy Sports: Often targeted by fraudulent actors.

If you have a 590 score and operate in one of these verticals, you are squarely in the target market for high-risk providers. They have the expertise and risk tolerance to handle your account, but this comes at a cost.

The Trade-Off: Understanding the Terms and Costs

Securing a merchant account with a low credit score is not about getting the same deal as everyone else. It's about gaining access to the payment ecosystem, but under terms that protect the provider. You must go into this process with your eyes wide open to the potential conditions.

1. Rolling Reserves

This is the most common safeguard. A rolling reserve is a percentage of your daily credit card sales that the processor holds in a separate account for a predetermined period, typically 90 to 180 days. This reserve acts as an insurance policy for the processor against future chargebacks or refunds.

• Example: You agree to a 10% rolling reserve held for 90 days. On a day you process $1,000, the processor deposits $900 into your business bank account and holds $100. After 90 days, that $100 (minus any chargebacks) is released to you.

While it ties up your cash flow, a reserve is a standard and often non-negotiable requirement for high-risk accounts.

2. Higher Processing Fees and Rates

High-risk providers incur more costs for underwriting, monitoring, and insuring your account. These costs are passed on to you. Expect to see:

• Higher Discount Rates: The percentage you pay on each transaction will be higher than the standard retail rate.
• Per-Transaction Fees: These fixed fees might also be elevated.
• Monthly and Annual Fees: Account maintenance fees, statement fees, and PCI compliance fees are common and can be steeper.

3. Term Lengths and Early Termination Fees (ETFs)

Mainstream processors often offer month-to-month agreements. High-risk providers typically require a multi-year contract (e.g., 3 years) to ensure they can recoup their investment in underwriting your account. If you decide to cancel before the contract term ends, you will likely face a significant Early Termination Fee, sometimes amounting to hundreds or even thousands of dollars.

A Practical Action Plan for the 590 Scorer

Knowing the challenges is half the battle. The other half is crafting a smart, proactive strategy to overcome them.

Step 1: Be Radically Transparent and Prepared

When you approach a high-risk provider, do not try to hide your credit situation. Instead, control the narrative. Be prepared to explain the circumstances that led to your 590 score. Was it a medical emergency? A period of unemployment during the pandemic? A one-time event you've since recovered from? Having a coherent story and, more importantly, documentation showing recent positive financial behavior (like consistent, on-time rent payments or a new, stable job) can make a significant difference.

Step 2: Assemble Your Business Documentation

A strong business plan can sometimes offset a weak personal score. Have the following ready:

• A detailed business plan with financial projections.
• Business bank statements (if applicable).
• Proof of business registration (Articles of Incorporation/Organization).
• Any relevant business licenses.
• 3-6 months of processing history if you're switching from another provider.

Step 3: Choose the Right Type of Provider

Avoid applying willy-nilly to every processor you find online. Each hard inquiry can slightly ding your credit score further. Instead, focus your efforts:

• Direct High-RISK Processors: Seek out ISOs (Independent Sales Organizations) and payment facilitators that explicitly advertise services for bad credit or high-risk industries. Do your due diligence: read reviews, check their standing with the Better Business Bureau, and understand their contract terms thoroughly.
• Payment Facilitators (PayFacs) with Higher Tolerances: Some PayFacs like Square or PayPal may still approve you, but they are known for holding funds or abruptly shutting down accounts with little warning if they detect suspicious activity. They can be a starting point, but not a reliable long-term solution for a growing business.
• Consider a Third-Party Processor: Platforms like Shopify Payments or BigCommerce Payments can sometimes act as an intermediary, though they often have their own strict requirements.

Step 4: Start Small and Build a Processing History

Your first merchant account is a foothold, not a final destination. The primary goal is to begin processing payments cleanly. Process transactions consistently, deliver your products or services excellently, and minimize chargebacks at all costs. After 6-12 months of clean processing history, you become a much more attractive candidate. You can then often renegotiate your terms, lower your reserve, or even qualify for a standard account with a different provider.

Looking Beyond the 590: The Future of Financial Inclusion

The conversation around credit scores and access to capital is part of a larger, global discussion on financial inclusion. The traditional FICO score, a relic of a pre-digital age, is increasingly seen as an imperfect and often exclusionary metric. It doesn't capture a person's full financial story, their resilience, or their potential.

This is where fintech innovation is beginning to change the game. Emerging technologies and underwriting models are looking at alternative data to assess creditworthiness:

• Bank Transaction Data: Analyzing cash flow, consistent income, and responsible spending habits through open banking APIs.
• Rental and Utility Payment History: Capturing data on consistent bill payments that are not traditionally reported to credit bureaus.
• Social and Professional Data: Some experimental models are even looking at educational and employment history.

For the entrepreneur with a 590 score today, the future is brighter. As these alternative scoring models gain traction, the path to securing a merchant account will become less about a single, flawed number and more about a holistic, real-time view of your financial behavior and business acumen. The key is to not let that number define you or your business's potential. It is a hurdle, not a wall. With the right knowledge, preparation, and partner, you can clear it and get your business transacting in the global marketplace.