Unfortunitely, Paypal only hurts your credit, they do nothing to help it.
I applied by accident by simply hitting the wrong button when I was buying some computers on a manufsacturer's web site. I clicked paypal credit instead of paypal, and suddenly I have this huge credit line.
Of course my credit score immediately dropped due to the query from applying for credit.
But applying by pressing one button in error had more than just the effect on my credit. The account was set up completely wrong. They used my company credit card's billing address, rather than my address, and they also sent a huge pile of paperwork to that address, packed full of info I would rather not be sharing with co-workers I don't know in another state. And I never knew I was applying for a credit account. All I was doing was using paypal so that my company credit card had less e-commerce-hack exposure.
After I placed my order, my computers arrived, but I never saw any charge, It wasn't on my company card, and it wasn't on any of my personal cards. I was supposed to report the purchase on my expense report, but I could never find it. So with a great deal of concern over what happened, I was debating what to do. When the computers arrived, I locked the unopened boxes up, because I expected that the purchase was going to come back and bite me. At this point in time I am unaware of the paypal credit account.
About a month later, someone in my company forwarded the paperwork they sent to the billing address,. HUGE surprise. I immediately returned the computers, eating the return fees personally. I then corrected the billing address, and re-ordered the computers so that they would be correctly billed. I explained to the computer company what had happened, but they couldn't help me move the charge to the correct account, so the return/reorder was the only possible resolution.
After it was all corrected, I considered my options with the account. In the end I decided to keep it, as it would improve my credit, right? I'm trying to buy a new house next year, so improving my debt ratio is a good thing! As me and my wife were working through the process of deciding what we were going to do with regard to buying a house, we were checking our credit constantly. The hit from thre paypal credit account creation was the first thing I noticed, but I fugured that they would start reporting soon. I used the account a whole bunch for a while, thinking that the card being active is more likely to start reporting sooner than later... Here I am 10 months later, and I'm finding that they are not reporting, and that they will never report (unless I fail to pay).
Now someone told me that Paypal doesn't report to the bureaus at all. I happen to know that is not true at all. They do a hard query when you apply, and if you go deliquent they report that to the bureaus. They don't do anything to help your credit, but if you are late with a payment they will in fact ding your credit.
I just asked then to close my account tonight. Too much risk, and zero reward. I can open up a "real" credit line elsewhere that will reward me with good credit for paying. Sure, all credit accounts have risk, but when they report your good status and unused credit to the bureaus, it mitigates the risk. Paypal credit is not mitigating the risk.
Now that isn't always a bad thing, but it is up to you on how much uncompensated risk you want to be exposed to. For me, it is zero.
