Credit Score Needed For Paypal Credit

April 10, 2023

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Many consumers use PayPal as their preferred payment platform to purchase goods and services. Purchases range from large and small businesses alike. However, did you know PayPal also offers their own credit and lending services? 

Let’s take a dive into how PayPal credit works, and what it takes to qualify for PayPal lending. Knowing the credit score needed for PayPal credit will help you determine if this creditor is the right fit for your financial and lending needs.

The Credit Score Needed for PayPal Lending

To get approved for PayPal, credit borrowers generally need a credit score of 670 or higher. Applicants with a credit score of 700 or higher have the best odds of getting approval for lending from PayPal. However, approval with PayPal is not solely based on the credit score of the applicant. 

PayPal’s authorization center will also take into account the applicant’s employment status, income after taxes, credit history, and debt-to-income ratio. In some cases, a fair credit score with a high income will get you approved. Alternatively, in other cases, a very good credit score coupled with low income will also get you approval. 

If you have poor credit, a limited credit history, or a score under 670 coupled with lower income, you likely won’t get approved for PayPal credit. If you apply and are denied, wait at least 100 days before applying again. 

How Does PayPal Credit Work?

PayPal Credit is a revolving credit line built right into your PayPal account. Their lending services provide borrowers with the option to pay for their purchase right away, or to pay over time. There is no annual fee to use PayPal credit. The annual percentage rate (APR) for PayPal credit fluctuates with the market’s prime rate and currently averages around 27%. 

PayPal uses Synchrony Bank as their lender. If you see a hard inquiry on your credit report from Synchrony Bank, this is likely due to a PayPal credit application. Synchrony most often pulls applicants’ credit through the Transunion credit bureau, although this may vary. 

It’s also important to note that PayPal does not allow borrowers to have more than one PayPal credit account. In fact, if you have an existing PayPal credit account and apply for a second one, any future charges will go to your original account. This means your new application will be denied. 

Applying for PayPal Credit 

Applying for credit with PayPal will leave a hard inquiry on your credit report. Their application and prequalification process requires borrowers to provide the following:

  • Their date of birth
  • Income
  • Social security number (the last four digits)
  • Their current legal name and address

Borrowers must also agree to their terms and conditions prior to submitting their application. Be sure to consult with a credit specialist before proceeding with your application.

Within seconds, PayPal’s credit approval system alerts borrowers whether they have been approved. Approved applicants can then link their PayPal credit card right to their PayPal account. This allows them to use PayPal credit as a primary payment option anytime they go to make a purchase. Additionally, this new line of credit can even be linked and utilized before the actual card arrives in the mail. 

If you have a PayPal account but don’t yet have a PayPal credit account, you will likely receive an invitation to apply for one. These invites are sent via email to qualified PayPal customers with a good payment history through PayPal. 

However, even if you have a PayPal account, applying for PayPal credit will still result in a hard inquiry on your credit report. Additionally, approval for PayPal credit is not guaranteed just because you have a preexisting PayPal account. Take these factors into consideration before applying.

Does PayPal Affect Your Credit Score? 

As discussed above, applying for PayPal credit will affect your credit score, creating a hard inquiry. Hard inquiries remain on your credit report for an average of two years. In general, one or two hard inquiries do not greatly impact your credit report. But, frequent hard inquiries in a short period of time will harm your score. 

Also, be sure that you’re in a financial position to pay off any purchases made with a PayPal credit account. If you fail to make payments on time or carry a high balance, this could negatively affect your credit score. Do not apply for PayPal Credit without secure financial backing.

Qualifying for PayPal Credit 

If your credit score is currently too low to qualify for PayPal credit, there are steps you can take. Here are some simple things you can do: 

  1. Pay your revolving credit balances as much as you can. 
  2. Make your current required payments on time. 
  3. Reach out to your current lenders and ask for a credit increase. 
  4. Carefully check your credit report for any errors. 
  5. Keep any old credit accounts open, even if you don’t use them regularly. 
  6. Keep your credit utilization rate as low as possible. 
  7. Work with a credit repair company to remove negative entries on your credit report. 

If you'd like to repair your credit, reach out to Credit Glory today. Our credit repair specialists are experienced at working with borrowers who'd like to work on their creditworthiness. We’re here to help you evaluate your situation, identify errors on your report, and submit disputes on your behalf. Restore your financial vibrancy today.

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