Having a Paypal account will destroy your credit and business

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Many people have paypal, but they don't know some important things about your credit.

When you signup with a Paypal account, you should of read their terms, which discusses some things but many things are not disclosed.

Paypal hurts credit score

A Credit Check?

The first is through credit report inquiries. According to the PayPal terms of service, your credit report may be reviewed in the following situations:

Credit Report Authorization. If you open a Premier or Business Account, you are providing PayPal with written instructions and authorization in accordance with the Fair Credit Reporting Act to obtain your personal and/or business credit report from a credit bureau. You are also authorizing PayPal to obtain your personal and/or business credit report: (a) when you upgrade your Personal Account to a Premier or Business Account, (b) when you request certain new products, such as the PayPal Debit Card, or (c) at any time PayPal reasonably believes there may be an increased level of risk associated with your Premier or Business Account.

When a company checks your credit reports, it creates an “inquiry” on the credit report that was used for the review. This inquiry can lower your credit scores, and result in a loss of several points. 

However they check at random, any time they want, and this is what hurts your score because the credit bureaus think you are applying for more credit and thus becoming a risk.

Bad Credit = No PayPal?

However, if you continue reading the terms of service, you’ll run into what appears to be an even more alarming clause:

9.1 Restricted Activities. In connection with your use of our website, your Account, the PayPal Services, or in the course of your interactions with PayPal, other Users, or third parties, you will not:

Have a credit score from a credit reporting agency that indicates a high level of risk associated with your use of the PayPal Services;

This is alarming for those with not so good credit.  

While there are anecdotal reports online of PayPal closing accounts due to poor credit scores – and leaving those customers in the lurch while they waited for the funds in their accounts to be unfrozen – these appear to have happened a few years ago. When we asked PayPal whether consumers’ accounts could be closed due to poor credit scores, they said no: “PayPal will not close user accounts solely based on a poor credit score.”

Another way a PayPal account could potentially affect your credit is through bad debt.

This issue appears to sometimes come into play when there is a dispute over something a seller has sold – either on eBay (which owns PayPal) or online – and payment was received via PayPal.

So, for example, let’s say you sell your cellphone on eBay and receive $100 from the buyer via PayPal. Then let’s say you turn around and quickly spend that money on another electronic item.

If your buyer later disputes the purchase, PayPal often refunds the buyer and tries to get the money back from you — the seller. But if the money has already been spent, and there is no backup form of payment available (such as a linked bank account), then that amount may be considered a bad debt. If that debt is turned over to collections, it potentially could  appear on your credit reports as a collection account, and lower your scores.

It’s also worth noting that when you check out using PayPal, you’ll be offered the opportunity to pay for your purchase using a service called “Bill Me Later,” which lets you pay for that item later. This service features a line of credit, and your credit report will be reviewed if you apply for one of these accounts. Bill Me Later is clear about how credit reports will be reviewed for this service:

A credit report is reviewed when you apply for a Bill Me Later account and occasionally when you ask for an increase in your credit line. Periodically, updates of your report are obtained, but these updates have no impact on your credit score. Your account is reviewed quarterly. If for any reason your credit line is reduced, you will be notified of the reason in writing.

Bill Me Later may affect your credit scores as a result of the inquiries that are reported as well as through the account that will be reported on your credit reports. The impact can be positive or negative, depending on whether you pay late or carry large amounts of debt.

Has your PayPal account affected your credit scores? Share 

What is more alarming is this:

Paypal violates over 120 laws concerning the FCRA  or Fair Credit Reporting Act

This is very alarming not only to consumers but also to businesses, mortgage firms, banks, financial firms offering credit to people with not so good credit.

There are over 120 laws alone that protect consumers and businesses in the Fair Credit Reporting act , however according to Paypal

Terms and services AUP states any consumer or business that is trying to improve their credit or get approved for credit by a company violates their terms of service. Offering services that include adding a customer's name to an established loan or a line of credit with the intention of improving the customer's credit score.


Paypal is in violation of the Fair Credit Reporting , Title 15 United States Code Section 1681 Act , the Constitution of the United States and other US laws.  They are under investigation by the Federal Trade Commission, the Better Business Bureau, and other Governmental agencies.  We also found out the Attorney General is looking into their serious violations. 


More of your rights under the constitution include: "natural rights" are "life, liberty, and property"; Private Property: (2) Tools needed for one's livelihood. (3) Personal property, which others may be denied the use of. Non-natural rights of personhood, (1) To enter into contracts, and thereby acquire contractual rights, to secure the means to exercise the above natural rights.[1,15] (2) To enjoy equally the rights, privileges and protections of personhood as established by law.  (3) To petition an official for redress of grievances and get action thereon in accordance with law, subject to the resources available thereto. Non-natural rights or citizenship: (1) To enjoy equally the rights and privileges of citizenship as established by law. We just confirmed that the attorney general will pursue this case against Paypal's violation of the law.

Would you like to read our open letter to Paypal click here

Please help us fight, by contacting the (click the agency title for the web link)  Currently we have a growing list of over 22 million who wish to file a class action lawsuit against Paypal.


BBB of California

California Attorney General

Nebraska Attorney General

and any other agencies to file a complaint against Paypal for violating your rights.  


Also they violate hundreds of other laws, including fair debt practicing act and others.  We advise you to open a Payoneer account, or other pre-paid card services to do your shopping online.  

Merchants never should open a Paypal or 2Checkout account!  Stripe is something new and better.




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