So it seems that PayPal, in their quest to open as many credit accounts as possible, is carelessly subitting hard credit inquiries. After recently winning an item in auction I was immediately presented, in a pop-up window, the opportunity to pay using PayPal credit. Having had a PayPal credit accout for many months, I thought this was a convenient option.
However, the poorly labeled window exists to open new accounts, despite giving no warning that a hard credit check will be performed. I've paid many times on E-Bay with my PayPal credit account - why now present the option to open an account I already have? Why not make it clear that the window exists to open a new account, instead of hiding the "log in to existing account" in a thin banner under the pop-up? PayPal had no trouble looking up my account apparently, as they seamlessly routed me to my account - however, this happened only AFTER silently performing a hard credit inquiry, which I only discovered today after reviewing my credit report. Why perform a hard credit inquiry before simply checking whether the account exists?
There is no reason to perform a hard credit inquiry without explicit warning, and there is absolutely no reason to perform said inquiry when it is easy to determine whether the account already exists. Hard credit inquiries damage credit scores, and judging by what I saw on the BBB website, this is a very common problem. No doubt they also cost you money, PayPal. Sloppy business practices all around.
So everyone here, keep your eyes open and avoid the hard credit check. I recommend you stay away from PayPal credit until they get their shady act together.
