PayPal has revolutionized the world of monetary payments. You can transfer your money from any part of the world. Due to its efficiency and high levels of secure transfers, it is the most commonly and widely used platform. The real rise in the popularity of PayPal started after it collaborated with eBay. Ever since then, it has completely blown up in terms of its acceptance. Online businesses all over the world, irrespective of their origin country, accept payments through the PayPal platform. Despite there being a million other reasons why people enjoy and prefer using the PayPal platform, the biggest one is that the cost involved in every transaction is free. Sure, there are some charges with transactions that are to be converted in another currency at the other end but these rates are very reasonable.

If you are a regular user of PayPal services, there is a chance that you saw the field of PayPal credit on the website quite often. In this guide, we will discuss in detail about PayPal credit. Does PayPal credit affect credit score is a question that most people often wonder about. In this blog, you will get a detailed answer to this question as well.

Does PayPal Credit Affect Credit Score?

PayPal users often discuss a lot about PayPal credit, especially those who perform a lot of online purchasing or are in the world of freelance businesses. If you are new to the world of PayPal, you might feel confused about the whole concept and what it really stands for. This is why before we dive into the answer of this Internet’s burning question; let us look into the details of PayPal Credit.

What is PayPal Credit?

PayPal credit is just like every other credit card that exists in the market. Similar to a credit card, you can do online shopping with available credit in the card or on debt. This means that you can; pay for the item or service you bought immediately or over a passage of time.

It is vital to remember that you need to apply for the PayPal Credit at the Synchrony Bank. They can accept or reject your request for the PayPal Credit. This credit card has a 0% interest rate if the payment is completed within a specific period of time (it is usually set to 6 months by PayPal).

Why Do Consumers Use PayPal Credit?

There are several different reasons why consumers prefer to use PayPal credit. Here are a few of them:

  1. PayPal credit allows you to purchase a product or service at any given time and it is up to you when you want to make the payment. This means that if you buy a product, you can slowly pay off the total amount over 6 months. This is not even the best part of PayPal credit. The best part is that there is 0 interest in the total cost of the purchase. You can slowly pay the money back without any interest whatsoever.
  2. Most of the online businesses accept payments through PayPal platforms. This means that a wide variety of options of products/services open up when going into the online market.
  3. There are multiple coupons and discounts offered when it comes to purchasing with PayPal. You can easily get your desired products and pay a lot less than what you would pay in other places for the same thing.

How Does PayPal Credit Work?

The PayPal Credit working is quite straightforward. All you have to do is create a new account by signing up and applying for it. Once you get the approval for it, you can start using it almost immediately. Every purchase that you make will give you the option to enter the details about your PayPal account. You can simply opt for the option of PayPal Credit. Once you choose that option, an application has to be filled with the details about your PayPal Credit.

Most of the time this information consists of your name, date of birth, net income, and the last 4 digits of your social security number. Then your application will be reviewed to ensure that you are not a fraud and will definitely pay back all your dues. If everything adds up and it is approved, then, a PayPal Credit of $250 will open up, allowing you to purchase the item you want and pay back the amount overtime.

Does PayPal Credit Affect Your Credit Score?

It is important to remember that your PayPal credit does affect your credit score. The team of PayPal reviews the credit score. It allows them to assess whether you have the potential to pay back the borrowed amount or not. If you fail to clear the credit, your credit score decreases as well.

How Can You Apply For PayPal Credit?

The process to apply for PayPal credit is simple. You can either accomplish it by asking the online store or apply for it directly after going on their website. As discussed above, you will have to apply for an application. The people will review this application in the PayPal business. They will decide whether you deserve the PayPal Credit or not.

Do not worry. The whole process of application for PayPal credit is easy. Moreover, most of the applications are approved within a small span of time. If you have a good credit score and a history of paying back on time, there is a good chance that your PayPal credit will be approved.

What Are The Pros and Cons of PayPal Credit?

There are pros and cons attached with every mechanism that exists in the world. Similarly, there are some issues and benefits of using the services of PayPal Credit. They are discussed as below:

Advantages of Using PayPal Credit          

Following are the advantages of using PayPal Credit in your online purchases.

  1. You can apply for it very easily. There are no complicated steps involved. All you have to do is fill out a form and you can accomplish the task within no time.
  2. PayPal is accepted by many different businesses. Moreover, the number of businesses becoming affiliated with PayPal Credit is increasing every passing day.
  3. You can use PayPal Credit to improve your overall credit score. The boards of revenues that keep an eye on your credit scores measure and track the amounts of payment you have c leered on time while using PayPal Credit. This creates a positive impact on your overall credit score.
  4. The return payment can be done gradually and with 0% interest rate. This is unique and convenient, as every other banking organization throughout the world demands a certain fee in return for advance payments. This is one of the major reasons why people prefer to use PayPal Credit instead of the traditional credit cards.

Disadvantages of Using PayPal Credit

Following are the disadvantages of using PayPal Credit for your online purchases:

  1. The limit of expenditure that you can make through PayPal Credit is quite low. Most people only get a line of credit for about $250. This means that if you want to make a large purchase, you cannot accomplish that through PayPal Credit.
  2. A term called Hard Inquiry is added to your credit report. Even though it is not a huge problem, it can eventually lower the overall credit score. If you start to use PayPal credit and apply for it multiple times in a short span of time, this can raise inquiries and seem questionable. In such scenarios, your credit score will have devastating impacts.

Bottom Line   

PayPal Credit is a very good source to use when making purchases. There are numerous benefits attached to it. To simply answer the question, does PayPal Credit affect credit score; yes, it does. This is because as soon as you apply for a PayPal Credit, a hard inquiry is added to your credit. If there are too many hard inquiries in a short time, things can become suspicious and your credit score becomes lower. If you need to use the PayPal Credit occasionally, then it is one of the best options because there is no interest while returning the money. This is a very minor inconvenience of PayPal Credit as compared to the numerous benefits it offers to the people who use it.


Here are the answers to some of the most frequently asked questions related to PayPal Credit.

Can you cancel PayPal credit?

Yes, you can cancel PayPal credit but before you do that make sure you have paid off any remaining amount. Otherwise, things can get legally complicated and influence your credit score negatively.

Does a negative PayPal balance affect your credit score?

Yes, a negative PayPal balance that is not paid fully in time will create a negative effect on your credit score.

Is PayPal credit a hard inquiry?

Yes, before you apply for PayPal credit, always remember that it is a hard inquiry.

Does closing your PayPal account affect your credit store?

You can close your PayPal account and not have an impact on your credit score as long as all your debts and PayPal Credit have been paid off.

Why is PayPal credit not showing your score?

This can happen in scenarios when the account has been dormant for too long. In other cases, if the PayPal server is down then your PayPal credit score is not shown.