Have a credit score from a credit reporting agency that indicates a high level of risk associated with your use of the PayPal Services ĭoes this mean your PayPal account could be denied – or terminated – because of bad credit? While there are anecdotal reports online of PayPal closing accounts due to poor credit scores – and leaving those customers in the lurch while they waited for the funds in their accounts to be unfrozen – these appear to have happened a few years ago. In connection with your use of our website, your Account, the PayPal Services, or in the course of your interactions with PayPal, other Users, or third parties, you will not: However, if you continue reading the terms of service, you’ll run into what appears to be an even more alarming clause:ĩ.1 Restricted Activities. When credit is checked, PayPal says that reports from all three credit reporting agencies are used, and “FICO or business credit score is used to determine tier.” It sounds like the individual user, or even most small businesses, are not likely to see an inquiry from PayPal on their credit report. A larger business would most likely have the company’s credit checked, rather than the individual’s.” Specifically they said, “PayPal will check the credit of users applying for Premier or Business accounts under certain circumstances, such as the individual requesting to accept transactions in excess of $10,000/transaction. Furthermore, PayPal representatives explained that these credit checks usually take place in situations involving larger transactions. When we asked the company how often this happens, we were told by email that “we pull credit for Pro/VT/Advanced applications – personal, blended or business credit – as part of our vetting process.” These three types of accounts are associated with businesses that want to accept credit cards, not individuals. You can see how inquiries impact your score with ’s Credit Report Card, a free tool that gives monthly credit score updates. The impact of a single inquiry should not be significant. This inquiry can lower your credit scores, though it will probably only result in a loss of a few points. When a company checks your credit reports, it creates an “inquiry” on the credit report that was used for the review. You are also authorizing PayPal to obtain your personal and/or business credit report: (a) when you upgrade your Personal Account to a Premier or Business Account, (b) when you request certain new products, such as the PayPal Debit Card, or (c) at any time PayPal reasonably believes there may be an increased level of risk associated with your Premier or Business Account. If you open a Premier or Business Account, you are providing PayPal with written instructions and authorization in accordance with the Fair Credit Reporting Act to obtain your personal and/or business credit report from a credit bureau. According to the PayPal terms of service, your credit report may be reviewed in the following situations:Ĭredit Report Authorization. The first is through credit report inquiries. There are two places in PayPal’s terms of service where credit is mentioned. And some merchants only accept payment via PayPal. In fact, for those who lack credit or debit cards, it may be one of the few ways to shop online. PayPal can be handy for those who do not have a credit or debit card and want to shop online, or for those who feel safer paying for items online without exposing their card information directly to the merchant. More than 137 million consumers around the world have PayPal accounts, and the service processes some 8 million payments every day, according to the company. In addition, PayPal offers an option where you can pay for an item via PayPal using your credit or debit card, even if you haven’t set up an account. When you buy an item online (and, more recently, in some retail stores as well) you can check out with your PayPal account, which will then process the purchase through your preferred payment method. Here’s how this service works: When you sign up, you can link your credit, debit and/or bank accounts to your PayPal account. If you care about your credit scores, you should know what Paypal does with credit information. But if you read the terms of service, you’ll see credit reports and credit scores mentioned, and that may leave you wondering how that will impact you. If you are one of the millions of people who use PayPal to send or receive money, you may not have given much thought to how it might affect your credit.
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