Next time you rent a car, think twice about how you pay. In some cases, the rental company can actually pull your credit report. And this can cause your score to drop. Pay using credit, not debit, to prevent this from happening.
GOBankingRates explains that, when you rent car with your debit card, many rental agencies actually perform a credit check to authorize your rental. As CreditCards.com points out, the rental company might see a debit payment as a red flag. To put it simply, they’re skeptical that you don’t have a credit card because your credit is poor.
Anyway, this is called a “hard inquiry,” and FICO confirms that it can indeed lower your score. While a single inquiry usually only lowers it about five points, that number can be higher if you don’t have many lines of credit open, or if your credit history is somewhat new. If you have multiple inquiries at once, that can also have a bigger impact on your score.
5 Surprising Things You Could Find on Your Credit Report | GOBankingRates
Photo by Moyan Brenn.