# Credit Account Review Process – Frequently Asked Questions

### Stripe conducts credit account reviews to protect businesses and their customers, ensuring that businesses remain in good health over time. Factors indicating high credit risk include elevated dispute activity, elevated refund rates, long delivery windows, long billing periods and sharp volume increases. Stripe reviews accounts continuously, with the frequency depending on the risk signals detected in day-to-day activity.
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Given our position in the financial ecosystem, Stripe is ultimately responsible for protecting businesses that use our services, as well as their customers. In keeping with industry standards, we conduct reviews of our users’ accounts – both new and existing – to ensure their businesses remain in good health as they evolve over time.
The information we collect during this process is used to confirm that Stripe has an accurate, up-to-date profile of your business and to determine whether any additional steps are required to help you handle future disputes or refund requests.
## What is credit risk and how is it generated?
In Payments, credit risk refers to the possibility of a loss resulting from a business’s inability to fulfil its customer obligations for which payments have been received. The level of risk associated with any business often comes down to the potential for incurring losses through disputes. Our analysis of years’ worth of payment processing data tells us that businesses which take payments in advance of delivery of goods and services are more susceptible to disputes and, therefore, create credit risk for payment processors like Stripe. While a business may have every intention of delivering the goods or services, long delivery windows can leave them vulnerable to unexpected delays or disruption which could prevent them from doing so, e.g. staffing or supply chain issues.
In general, businesses must demonstrate operational and financial resilience to continue fulfilling their business obligations.
## Which factors or signals indicate high credit risk?
One or more of these factors could indicate high credit risk:
* **Elevated dispute activity:** Disputes (or chargebacks) occur for many reasons. Usually, they are a result of customers not recognising a transaction, not authorising the transaction or not wanting to pay for the goods or services they received. Stripe accounts with elevated (more than 0.75%) dispute rates are considered high risk.
* **Elevated refund rate:** A substantial increase in refunds (for example, a 100% increase from the week or month before) could indicate that a business is having issues fulfilling orders.
* **Industries with longer delivery windows:** Certain industries where goods or services are typically delivered weeks or months after payment is received, such as travel and events businesses, are considered high risk. The long delivery windows associated with these business types leave them vulnerable to unexpected delays or disruption, such as staffing or supply chain issues, that could affect their ability to fulfil orders.
* **Businesses with long billing periods:** Businesses that bill customers in advance for services that will be delivered over a long period of time, such as annual billing, retainers or account credits, are vulnerable to disputes and refunds from customers who decide not to continue paying for the service.
* **Sharp volume increase:** Businesses that see significant increases in volume can sometimes struggle to cope with customer demand, which can lead to orders not being fulfilled. Large spikes in payment volume could also be an indication of a fraud attack.
## What to expect during this process
During a review, we’ll take a close look at your business model, processing history, business reputation, financial stability and Stripe product usage, amongst other things. We will also check that you provide clear information to your customers to reduce the risk of disputes, such as how to contact your business, your fulfilment policies (e.g. refund, cancellation or delivery policies) and details about any free trials offered.
To help us obtain a holistic view of your business, we may ask you to provide updated financial information, such as bank balance and transaction history, financial statements and management accounts relating to your business. We may also ask additional questions about your operations management and recent processing history on Stripe.
## Why these reviews are necessary
Stripe takes on a significant liability as a payment processor and is liable for the refunds and disputes that arise when our users have taken payment from their customers but are unable to fulfil their orders. We’re also subject to strict requirements imposed by our partners in the payments ecosystem that dictate the level of risk that we're able to support. As a result, we are required to complete several types of reviews for every business that processes with us to monitor credit risk and comply with our financial partners.
The information you provide, such as details about your business model, funds flow and vendor relationships, helps us to better understand your business and to assess it fairly. In addition, the insight we gain from linking your bank account via the Stripe Dashboard gives us a current and continuous understanding of your liquidity, which can reduce the need for frequent reviews.
## How you can help ensure a smooth review
There are a number of things you can do to help ensure that your review is completed quickly and efficiently:
* Keep your contact information up to date to ensure that we can contact you, if and when we need to.
* Provide as much detail as possible when responding to our questions and include any relevant supporting documentation.
* [Link your bank account](https://stripe.com/docs/linked-accounts/faqs) to reduce the need for us to collect additional information directly from you and potentially reduce the frequency of reviews on your account.
We rely on the information that’s provided to us when assessing risk. Without this information, we might be left with an incomplete profile of your business and, therefore, add friction to the review process.
## What actions might we take after a credit risk review?
The actions we take will vary depending on the level of risk we attribute to your business. In most cases, once the review is complete, your business will be able to continue processing as normal.
For businesses that are determined to have an increased level of risk, we may need to hold a portion of each transaction in reserve to help ensure funds are available to cover future refunds or disputes. In some rare instances, if a business is determined to be very high risk, if it has remained in a card network monitoring programme for an extended time or is in violation of the Stripe Services Agreement, we may need to close the account.
## Payment best practices for keeping your business in good standing
Here are some ways to manage your credit risk, prevent disputes and generally keep your business in good health:
* If possible and where applicable, charge customers as close as possible to the date on which they will receive the product or service to reduce the delivery window.
* Pause any recurring charges if your business experiences any unexpected or ongoing disruptions in service.
* Proactively cancel and refund charges that are likely to be disputed.
* Track your overall dispute activity in the Reports overview on your [Dashboard home page](https://dashboard.stripe.com/b/acct_28DT589O8KAxCGbLmxyZ?destination=%2Fsettings%2Faccount).
* If you receive any disputes, [respond](https://stripe.com/docs/disputes/responding) to them as soon as possible.
* Take steps to [protect your business](https://stripe.com/docs/disputes/prevention/fraud-types) against payment fraud.
* Clearly display your shipping terms, return policy, refund policy and any money-back guarantees on your website so that your customers can easily find this information.
* Keep detailed copies of receipts, agreements and proof of shipment. For digital goods or services, maintain access logs or documentation that ties usage back to customers.
* Provide an easy way for customers to contact you for any product or service-related issues.
* Define customer service response times and make it easy for your customers to resolve payment-related issues.
* Establish a process for communicating any delays on delivery of products or services to your customers.
* Ensure you have sufficient product in stock to cover your expected sales to avoid any issues with fulfilment.
* Provide your customer with tracking numbers.
## How often do we review accounts?
We continuously monitor the account of each business that works with Stripe with our automated systems. The amount or frequency of reviews we conduct of any account depends on the risk signals that we pick up from our monitoring of day-to-day activity.
We may conduct more frequent reviews when a business is at risk of not fulfilling business obligations due to their operational or financial position. Reviews of this nature are common practice in the financial services industry.
In addition to our occasional credit risk reviews, we also conduct reviews when we see anomalies in processing behaviour and when we think your business might be adversely affected by industry headwinds or a challenging economic environment.
[Linking your bank account](https://stripe.com/docs/linked-accounts/faqs) gives us a current and continuous understanding of your liquidity, which may reduce the need for us to collect additional information directly from you, as well as the frequency of reviews on your account.
## How does Stripe ensure that information is handled confidentially and securely?
Data security and confidentiality are incredibly important to us. The information you share is intended solely for the purpose of underwriting and will be shared only on a need-to-know basis within Stripe. For more information about how Stripe handles your data, please take a look at our [Privacy Policy](https://stripe.com/privacy).
## What happens if you can't provide the requested information?
These account reviews are a required step as a condition of processing for our users. Providing this information in a timely manner helps ensure there are no unforeseen delays or unexpected risk mitigations that could affect your business.
If you are unable to provide the requested documentation or information, [please contact](/?contact=true) us as soon as possible. We’ll work with you to try and find alternative solutions whenever possible.
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Related articles
[Managing credit risk for platforms and marketplaces](https://stripe.com/guides/managing-credit-risk#how-to-manage-credit-risk)
[Linked Accounts FAQs](https://stripe.com/docs/linked-accounts/faqs)
[Reserves FAQ](/questions/reserves-faq)
View reserve status and details in the Dashboard