PayPal Credit does have an impact on your credit score. It is important to understand that PayPal Credit functions as a credit line, similar to a credit card or personal loan. As such, your activity and payment behavior with PayPal Credit will be reported to the credit bureaus and can affect your credit score.
Late payments or missed payments on your PayPal Credit account will be reported to the credit bureaus, specifically Experian. This negative information will be included in your credit report and can have a detrimental effect on your credit score. It is crucial to make all payments on time to avoid any negative impact on your credit.
On the other hand, responsible use of PayPal Credit can have a positive impact on your credit score. Making regular, timely payments and keeping your balance low can demonstrate good credit management and responsibility. This can help improve your credit score over time.
It is worth noting that PayPal Credit used to be considered a “hidden tradeline” in the past, meaning it did not report any activity to the credit bureaus. However, this changed in late 2019, and now PayPal Credit does report to the credit bureaus, making it an important factor in your credit history.
It is advisable to regularly monitor your credit report to ensure that your PayPal Credit account is being reported accurately. You can request a free credit report from each of the three major credit bureaus once a year through annualcreditreport.com. Reviewing your credit report allows you to identify any errors or discrepancies and take appropriate action to rectify them.
PayPal Credit does impact your credit score. Late payments or missed payments can have a negative effect, while responsible use and timely payments can help improve your credit score. Monitoring your credit report is essential to ensure accurate reporting and address any issues that may arise.