Does PayPal Credit Affect Credit Score?

Does PayPal Credit Affect Credit Score

Have you been considering a PayPal Credit application and have some questions? 

The frequent question is, “Does PayPal Credit affect your credit score?” and the simple answer is, Yes, it does

What is PayPal Credit?

PayPal Credit is a line of credit that comes with no annual fee. You can use your PayPal line of credit anywhere that accepts PayPal as a form of payment.

With your PayPal line of credit, you can make purchases and pay immediately (preferably) or overtime though this option will be subject to an annual percentage rate (APR). 

New accounts are starting with a variable purchase APR of 23.99%.

Applications for PayPal Credit are subject to approval by Synchrony Bank.

PayPal Credit can positively or negatively affect your credit score, depending on your payment history. 

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Can Paypal Credit Affect Credit Score?

If you make your payments on time, you have nothing to worry about. However, late, missed, or defaulted payments will be reported to the credit bureaus, which will cause a drop in your credit score.

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Benefits of PayPal Credit

Paypal Credit comes with no annual fee.

Plus, if your application is accepted, the line of credit will be directly added to your Paypal account. You won’t have any card number or expiration date to manage. 

Use your credit online wherever they accept PayPal. There are millions of stores to choose from, such as;

  •  eBay
  • Apple
  • Target
  • Sephora
  • Ulta Bauty
  • Walgreens
  •  The Home Depot
  • Bath Bath & Beyond

Does Applying for PayPal Credit Affect Your Credit Score?

Yes, when applying for a PayPal line of credit, on average, people will experience a 5-10 points drop in their credit score as Synchrony Bank will run a hard inquiry.

Does PayPal Credit Report To The Credit Bureaus?

Yes, currently, PayPal credit reports to the three major credit bureaus (Experian, TransUnion, and Equifax).

However, Paypal only began reporting to the credit bureaus in 2019. This change surprised some consumers who abruptly saw a dip in their credit scores when PayPal Credit suddenly appeared as a tradeline on their credit reports.

By reviewing the terms of service, the document clearly states the following information under the Credit Bureau Reporting section;

We may report information about your account to the credit bureaus. Late payments, missed payments, or other defaults on your account may be shown in your credit report.

PayPal Credit Terms and Conditions

Consumers should treat their PayPal Credit as they would any other line of credit or credit card. Ensure that all payments are made on time to avoid any adverse reporting.

Will a PayPal Debit Card Affect Credit Score?

No, a PayPal debit card does not typically impact your credit score. A debit card withdraws money from your checking account from your own available funds.

It is, however, essential to maintain responsible banking activities. Banks that still use ChexSystems have access to your account activity (both positive and negatives) therefore affecting future applications to open a new bank account.

How To Make a PayPal Credit Payment?

If you prefer to pay by phone, you can speak with a representative to put through your payment at 1-844-373-4961.

You can also send payments by mail to;

How To Remove PayPal Credit From Your Credit Report

Sometimes mistakes happen, but it’s important not to ignore any reporting errors when it comes to your credit score.

If you’ve noticed PayPal listed on your credit reports and have not applied for PayPal credit nor their Mastercard, it’s time to contact PayPal directly.

To reach a PayPal Credit representative, dial 1-888-221-1161.

For communication by mail;

Conclusion: Does PayPal Credit Affect Credit Score?

Whether you have an old PayPal Credit account or file a new application, you can expect PayPal credit to have an impact on your credit score.

Paypal will report any overdue, missed, or default payments to the credit bureaus. Avoid any negative impact on your credit score by using your PayPal line of credit according to the terms of service.

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About the author

Clara is the founder of Credit Rise Up, an entrepreneur, personal finance expert, and credit repair enthusiast. She’s committed to helping her readers get on the right track and take actionable steps towards improving their credit by using the experience that allowed her to join The 800 Club. Find out more.

Does PayPal Credit Affect Credit Score?