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Paypal Credit - Warning

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stevetretakis
New Community Member

Paypal Credit - Warning

Be very careful using PayPal Credit, it is very , very easy to hammer your Credit Scores without doing anything wrong, (being late or missing a payment). I thought that i would give it a try on a 10k purchase, and they approved the credit. Realize that Credit Score generating Companies, not only look at total credit uses from all sources, but how much you are using from a single credit line.  In my case I have a 1/2 Doz credit cards , all at "0"  but PayPal Credit saw a need to report to  Experian, Equifax and TransUnion that i was utilizing 5k of the original 10k, and my credit score took a 20 point hit. Even thought i was using less than 4% of my total credit from all revolving accounts.

Don't bother calling them to complain, it was like taking to a machine. As soon as i saw this impact I paid off the account and called them to notify credit agencies.  I was told that this is done Monthly and there is no mechanism to push a change sooner. 

So I told them to close the line of credit and now I have a ding on my Credit report for an account i paid off and closed weeks ago and it will likely remain on my history into December.

Just be warned..

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1 ACCEPTED SOLUTION

Accepted Solutions
sharpiemarker
Esteemed Advisor

Re: Paypal Credit - Warning

@stevetretakis 

 

Since the Syncrony Bank take over of PPC, they are reporting activity to CRAs now and yes, when you put any charge on any card that's reported, it will have an impact on your credit score, even a small purchase of under $30 (seen it happen, took off one point lol I'm like really? One point?), especially if you have zero to little open balances and then to plop on a $5k doozy, forgettaboutit. The tech is there for precisely track use and delinquencies and formulate our scores. I would be shocked too but I understand it and I think its good for the fraud measures.

 

If you have a very high score like in the 800s, you still in the "excellent" or above average level.

 


Kudos & Solved are greatly appreciated. 🙂

View solution in original post

4 REPLIES 4
sharpiemarker
Esteemed Advisor

Re: Paypal Credit - Warning

@stevetretakis 

 

Since the Syncrony Bank take over of PPC, they are reporting activity to CRAs now and yes, when you put any charge on any card that's reported, it will have an impact on your credit score, even a small purchase of under $30 (seen it happen, took off one point lol I'm like really? One point?), especially if you have zero to little open balances and then to plop on a $5k doozy, forgettaboutit. The tech is there for precisely track use and delinquencies and formulate our scores. I would be shocked too but I understand it and I think its good for the fraud measures.

 

If you have a very high score like in the 800s, you still in the "excellent" or above average level.

 


Kudos & Solved are greatly appreciated. 🙂

View solution in original post

sharpiemarker
Esteemed Advisor

Re: Paypal Credit - Warning

@stevetretakis 

 

What I don't get is, why would you close the account? Just because of the 20 points? If you were really good at paying back, the score will go back up as your payments are reflected and who knows it could have boosted your score when it gets back up. Do you use happen to use Credit Karma? They are pretty good and you can get an account for free. It tracks your scores.


Kudos & Solved are greatly appreciated. 🙂
stevetretakis
New Community Member

Re: Paypal Credit - Warning

the credit line was 10k...  reporting agencies don't like over 3% use.. so a 3500 charge depending in time of month, (when the report to credit bureaus) could impact my credit score for 2 or 3 months..   Don't need the aggravation...  

Powerbrainsllc
Contributor

Re: Paypal Credit - Warning

Mine dropped more than 40 points. Welcome to the club! I'll transfer my 6month special purchase debts or pay it off way before the 6month no interest period is over....and will not use the account that much anymore. Special purchase option is not an option anymore for my business.