Working with the right merchant services company for your credit repair and monitoring business can be the difference between lasting prosperity and short-term gain, long-term pain. Therefore, it’s essential that you do not cut corners, and ensure you get the assistance you and your business needs for success. With the right guidance, achieving your long-term goals will be that much easier.
But how do you know if L3 Payments’ team of experts is the best fit for your credit repair and monitoring business?
Let’s start with the basics.
What is credit repair?
As you may have gathered from its name, credit repair is a way to fix poor credit. A third party (usually a “credit repair organization” or a “credit services organization”) tends to execute credit repair by taking steps to remove negative information from credit reports. In exchange, customers pay a fee, often through a monthly subscription.
Credit repair companies help consumers take false or unproven information off their credit reports. But they also take steps to remove negative but correct information from these same reports. These companies may also edit credit information to make it more favorable to the customer.
As credit repair is a high-risk business, you are likely marketing yourself to customers to improve their credit, and you probably operate in the for-profit realm. Although credit repair is a high-risk business, it is essential to know that—although it is legal federally and in nearly every state—it is a misdemeanor in Georgia.
But why is credit repair considered high-risk?
First, it is integral to understand that traditional payment processors are less likely to work with high-risk merchants for various reasons. Still, their main concerns are reputational and the risk of fraud. In other words, payment processors risk their reputation by working with businesses in high-risk categories.
For a variety of reasons, banks consider credit repair businesses as high-risk. These reasons include:
- The amount of risk a bank wants to take on payments. Banks determine that consumers who are in need to repair their credit are higher-risk. Someone with a low credit score may be less reliable, so if you are billing people with lower credit scores, you are more at risk of not receiving funds or ultimately receiving increased refund requests.
- Credit repair and monitoring companies tend to operate using subscription services in the form of monthly memberships. Banks deem subscription services as higher-risk because they are more likely to encounter chargebacks, primarily due to negative-option billing.
- The length the credit repair business has been established alongside credible history affects risk determination.
For more information on what constitutes a high-risk business, click here or contact one of our representatives today for a free consultation!
What is credit monitoring?
In short, credit monitoring… monitors your credit. And credit monitoring businesses let a customer know when a change happens to their credit reports. These changes can be linked to fraudulent behavior, like someone misusing a customer’s personal information. Credit monitoring can help mitigate fraud, and credit monitoring services can help customers take control of their credit.
When a customer goes through a credit monitoring company, rather than tackling it alone, they will likely have more favorable results. Some of the credit monitoring companies will offer may well include:
- Any address or name changes to a customer’s credit file
- All public records (i.e., bankruptcies)
- All personal information listed on the dark web (email, SSN, passwords to different websites, etc.)
- Credit payments and balances
- Any new accounts opened using the customer’s name
- Credit report ‘hard inquiries’ (i.e., someone using the customer’s name to apply for credit)
Credit monitoring cannot guarantee protection from unauthorized transactions or identity theft. However, companies offering this service send customers alerts and resources to help them prevent theft and inform them in real-time if something out of the ordinary happens to their credit accounts.
What challenges do credit card repair merchants encounter?
Credit repair merchants can face a few challenges. In addition to the high-risk category mentioned earlier, they are also likely to discover that white-label providers—however helpful they may be—often do not assist with the creation of a merchant account or setting up a payment gateway.
However, white-label providers do offer systems that help merchants create a credit repair company. They offer many services, which include building you a custom website, importing credit reports, helping you manage your brand, growing your leads, and many others. Using this type of company can be a lot easier than starting from scratch, but you may still encounter difficulties.
Pairing a white-label service with the additional assistance from a payment processing company, to add a gateway and assist with merchant account acquisition, is often the final piece of the puzzle for a successful credit repair business.
How can L3 Payments help my credit repair and monitoring business?
L3 can help you in several ways. Its team of experts offers in-depth knowledge of credit repair payment processing, excellent customer service, and decades of experience assisting high-risk merchants similar to you to optimize their payment processes. L3 is your best option to help you realize your credit repair business’s lofty goals.
We are here for any questions you may have. Contact one of our representatives today for a free consultation!
