Buzz
Next time you're renting a car, consider how you're paying. In some cases, the rental company may check your credit report, which could lead to a drop in your score. To avoid this, use credit instead of debit.
According to GOBankingRates, many car rental agencies perform a credit check when you pay with a debit card. As noted by CreditCards.com, these companies may view debit payments as a warning sign, assuming your lack of a credit card indicates poor credit.
This is known as a 'hard inquiry,' and FICO confirms that it can lower your credit score. While one inquiry might only drop your score by five points, it can have a greater impact if you have few credit accounts or a relatively new credit history. Multiple inquiries could also lead to a more significant reduction in your score.
The good news is, avoiding this is simple—just use a credit card instead of a debit card. For additional tips, visit the full post linked below.
Image by Moyan Brenn.
