A thorough background check of personal credit is conducted by merchant account providers when applying for a merchant account. This to determine your capacity to pay, establish credit history, predict delinquency, and to determine credit amount to be granted.
Before your account application will get approval, your credit history will be determined. Although personal credit is not the only determining factor in getting an approved account, yet, this is an integral part of the application process. You can also get the best personal credit checks services online.
There are several reasons why a background check on personal credit is mandatory:
Determine your capacity to pay
In case you have bad personal credit and declared bankruptcy, this is a ground for denying your application. If you don't have the capacity to pay, so there is no reason for the bank to grant the credit.
Establish a credit history
The processing bank needs to have a basis to establish the worthiness of credit grants. Even a single credit history showing consistent payment is enough to get approval.
It helps predict delinquency of payment in the future. If the bank finds out of the successive delayed payments, your application for a merchant account will be disapproved since that would already give them the notion that it might still happen again, should you be given such an account with them.
Determine the credit amount
Since a merchant account is a line of credit granted to the seller, the bank should be very careful enough in determining the credit limit. If your credit rating is good, the processing time would be faster and a higher credit line will be given.