Does Paypal Credit Affect Credit Score

Does Paypal Credit Affect Credit Score

PayPal does not affect your credit outright, though if you dig into their terms of service you may notice that they mention credit scores and reports. To be a smart consumer and know more about the platforms you’re using, you should know what PayPal does with your credit information. 

PayPal is a popular online payment tool with over 403 million users. The good news for those who enjoy its ease of use: PayPal does not affect your credit score. This is because your credit does not get pulled when you make a payment using their platform—in fact, PayPal doesn’t share any of your financial information when you make a purchase using their tool.

Much like Venmo and other online purchasing tools, PayPal works by electronically and instantly wiring money from your bank account to the account of the seller you’re purchasing from. This doesn’t require a hard or soft credit check, just as buying groceries or making a rent payment doesn’t require a credit check. 

PayPal’s Pay in 4 method of installment payments, a form of “buy now, pay later” financing, also does not require a credit check or appear on your credit report—even if you’re paying in installments using your credit card. There are only a few circumstances where you’ll see PayPal on your credit report.

Why do I see PayPal on my credit report?

Though PayPal does not outright affect your credit score, there are some mentions of credit in their terms of service, and some users may see PayPal reflected on their credit report. Here’s why.

You opened a Business or Premier account 

Users who open a Business or Premier PayPal account give PayPal written authorization (in accordance with the Fair Credit Reporting Act) to obtain their personal and/or business credit reports from a credit reporting agency. In turn, this requires a credit inquiry for PayPal to obtain those records, which is then reflected on your credit report. 

A single inquiry should not be significant enough to drop your credit score by more than a few points. This inquiry is only performed for those who want to upgrade their PayPal account to a Business or Premier account, so the average user will likely not have to worry about PayPal performing a credit inquiry on them.

You requested a new product or account add-on

When users request new products or add-ons to their account, such as a PayPal debit card or PayPal Credit, PayPal will perform a credit check to ensure you’re a reliable borrower. Whether this is a hard or soft credit check is determined by what you’ve requested—for instance, PayPal will perform a hard credit check on a request to open a PayPal Credit account. (But more on that later.)

Your account is deemed risky

Any time PayPal believes there’s an increased level of risk associated with your Premier or Business PayPal account, they may perform a credit check to verify the account is actually being used by you. Risky behavior may mean an unusually high number of large purchases, purchases from a flagged account or repeated failed login attempts.

PayPal vs. PayPal Credit

While PayPal by itself does not affect credit, it has a branch known as PayPal Credit that does have a direct impact on your credit score. PayPal Credit is a program that gives PayPal users extra time to pay off a purchase made through PayPal with a revolving line of credit, based on creditworthiness.

If your application for PayPal Credit is approved, you can then use PayPal Credit as a payment option for websites and retailers that offer payments through PayPal. Read on to learn more about how PayPal Credit affects your credit score.

How PayPal Credit affects credit score 

You have to apply for PayPal Credit much in the same way you have to apply for a credit card. Considering this is a new line of credit for you, PayPal will do a hard credit check on you to see whether or not you’re a reliable borrower—which is reflected in your credit score. The approval process for PayPal Credit takes only a few moments.

Once approved, you can use PayPal Credit most anywhere that accepts PayPal. For purchases that cost more than $99, you’ll have six months to pay it off without interest. With payments of $99 or less, you’ll need to pay for it in full to avoid paying interest. If you use PayPal Credit to send money to a friend, you’ll need to also pay the amount owed in full by the due date to avoid interest fees.

PayPal Credit affects your credit score in that it acts like a regular credit card, but is only able to be used with merchants that accept PayPal. This means that if you miss a payment or pay late, your credit will take a hit just like if you missed a credit card payment. 

As always, check your credit report and history to see if opening a new line of credit is a good idea for you.

Additional ways to be safe when using online payments 

Even though PayPal may not affect your credit score, it’s still important to be vigilant when making payments using any form of online payment option. Here are some tips to keep in mind when sending or receiving mobile or online payments:

  • Double-check that your money is being sent or received by the right person. Many online merchants may not take responsibility for money sent to the wrong person—meaning you may not see that money again if you make a mistake.
  • Sign up for fraud alerts. Though stealing your credit card information from an online merchant isn’t as easy as swiping your wallet, some hackers can steal your credit card information or even your whole account from an online payment platform. Be sure to sign up for fraud alerts and two-step verification on money transfer platforms so you’re alerted if someone tries to hack your account.
  • Ensure you’re paying the correct amount. It can be easy to type in an extra “0” when making an online payment, and the last thing you want is to send someone $300 when you meant to only send $30. Always check the price owed to make sure you’re sending the correct amount.
  • Don’t send money to people you don’t know. Use your best judgement when purchasing goods or services through PayPal and other online services, but it’s best to err on the side of caution and not make a habit out of sending money to people you don’t know.
  • Don’t include personal information in payments. While most online payment platforms (including PayPal) won’t reveal sensitive information, such as your credit card number, to senders, you should try to limit the amount of information you share on these platforms. Try not to share more than your email and phone number on your account, and only give your address to a trustworthy recipient. 

PayPal can be an easy way to send and receive money without using your physical card, and the regular platform does not have any impact on your credit. Remember to be smart and make informed choices with any sort of online purchasing tool, even if it claims to not affect your credit in any way.

Photo of author

Author J Lipsky

Thank you for visiting

Leave a Comment

Business Finance

About Us

Business Finance News is a brand oriented to business owners and dedicated to analyzing and comparing the cost and conditions of B2B procurement of goods and services through free quotes delivered by business partners.


Address 5050 Quorum Drive, (75254) Dallas TX

telephone 844-368-6072


A personal loan is a medium term loan with a fixed interest rate that is repaid in equal monthly payments and it's usually limited to 24 months. Loan offers and eligibility depend on your individual credit profile. Our lenders can help you obtain as much as $3,000 depending on the lender, your state and your financial situation.

The owner and operator of is not a lender and is not involved into making credit decisions associated with lending or making loan offers. Instead, the website is designed only for a matching service, which enables the users contact with the lenders and third parties. The website does not charge any fees for its service, nor does it oblige any user to initiate contact with any of the lenders or third parties or accept any loan product or service offered by the lenders. All the data concerning personal loan products and the industry is presented on the website for information purposes only. does not endorse any particular lender, nor does it represent or is responsible for the actions or inactions of the lenders. does not collect, store or has access to the information regarding the fees and charges associated with the contacting lenders and/or any loan products. Online personal loans are not available in all the states. Not all the lenders in the network can provide the loans up to $3,000. cannot guarantee that the user of the website will be approved by any lender or for any loan product, will be matched with a lender, or if matched, will receive a personal loan offer on the terms requested in the online form. The lenders may need to perform credit check via one or more credit bureaus, including but not limited to major credit bureaus in order to determine credit reliability and the scopes of credit products to offer. The lenders in the network may need to perform additional verifications, including but not limited to social security number, driver license number, national ID or other identification documents. The terms and scopes of loan products vary from lender to lender and can depend on numerous factors, including but not limited to the state of residence and credit standing of the applicant, as well as the terms determined by each lender individually. 


APR (Annual Percentage Rate) is the loan rate calculated for the annual term. Since is not a lender and has no information regarding the terms and other details of personal loan products offered by lenders individually, cannot provide the exact APR charged for any loan product offered by the lenders. The APRs greatly vary from lender to lender, state to state and depend on numerous factors, including but not limited to the credit standing of an applicant. Additional charges associated with the loan offer, including but not limited to origination fees, late payment, non-payment charges and penalties, as well as non-financial actions, such as late payment reporting and debt collection actions, may be applied by the lenders. These financial and non-financial actions have nothing to do with, and has no information regaining whatsoever actions may be taken by the lenders. All the financial and non-financial charges and actions are to be disclosed in any particular loan agreement in a clear and transparent manner. The APR is calculated as the annual charge and is not a financial charge for a personal loan product. 

Late Payment Implications

It is highly recommended to contact the lender if late payment is expected or considered possible. In this case, late payment fees and charges may be implied. Federal and state regulations are determined for the cases of late payment and may vary from case to case. All the details concerning the procedures and costs associated with late payment are disclosed in loan agreement and should be reviewed prior to signing any related document. 

Non-payment Implications

Financial and non-financial penalties may be implied in cases of non-payment or missed payment. Fees and other financial charges for late payment are to be disclosed in loan agreement. Additional actions related to non-payment, such as renewals, may be implied upon given consent. The terms of renewal are to be disclosed in each loan agreement individually. Additional charges and fees associated with renewal may be applied. 

Debt collection practices and other related procedures may be performed. All the actions related to these practices are adjusted to Fair Debt Collection Practices Act regulations and other applicable federal and state laws in order to protect consumers from unfair lending and negative borrowing experience. The majority of lenders do not refer to outside collection agencies and attempt to collect the debt via in-house means. 

Non-payment and late payment may have negative impact on the borrowers’ credit standing and downgrade their credit scores, as the lenders may report delinquency to credit bureaus, including but not limited to Equifax, Transunion, and Experian. In this case the results of non-payment and late payment may be recorded and remain in credit reports for the determined amount of time.