Question from a novice, fresh out of college: While trying to set up some electronic payment functions a month ago, I accidentally signed up for a PayPal Smart Connect account—which I didn't even know was possible. Without my knowledge, Smart Connect was set as a "default backup" for my online purchases, and it absorbed several recent purchases. As of today, I've paid off the balance.
My question now is, at this point, what action would be in the best interest of my credit score? Should I continue using Smart Connect from time to time? Should I close the account? Just stop using it? From what little I've read and heard, none of those options would have terribly beneficial results... I guess at this point I'm just trying to minimize damage.
Based on the article below, which basically says that any action involving a line of credit is harmful, I believe that the best option would have been to never start the Smart Connect account. (And again, I didn't even mean to do so!) But since turning back the clock isn't an option, I'd be interested to know what is advised.
This is the article I was reading: http://www.quickenloans.com/blog/mortgage-missteps-opening-closing-line-credit.
At first, I wasn't happy that I was automatically enrolled with Smart Connect when I applied for the Paypal MC. Now that I have realized how great it is, it's my main source of funding for Ebay purchases on a daily basis. It reports to all three bureaus, and I have already had 2 auto CLI's. It started at $600.00, and is now at $1700.00 months later.........
My question now is, at this point, what action would be in the best interest of my credit score?
Use it reposnbily. The damage from opening it is already done. Closing it won't necessarily help unless you think you'll misuse it and you'd be better off without it. As with any revolving account, the immediate impact from closing it would be increased utilization due to decreased total credit limits. As I suggested in your store card thread, you might want to read up on general credit scoring. Again, this info is general info and it's not specific to just store cards or Paypal Smart Connect. We're certainly happy to help with specfiic questions but a general understanding of credit is a very useful tool.