It's a little known fact that most car rental companies have a clause in their agreement that says they have the right to pull your credit reports if you use a debit card to rent a vehicle. What this means is that if you choose debit over credit for your next car rental, you'll likely end up with a hard inquiry on your credit reports and a negative hit to your FICO scores.
That doesn't seem fair, right? It's not like you're applying for a mortgage or a credit card offer? Well, the rental companies don't see it that way. If you don't even have a credit card and you're going to be driving off their lot with a vehicle worth $25,000, they want some assurance you can be trusted. They get that extra assurance by taking a closer look at your credit history.
Too many credit inquiries can really drag your FICO scores down, so keep this in mind the next time you're traveling and need to rent a car. Not only will using a credit card help you avoid an unnecessary hit to your credit scores, but don't forget that your credit issuer may also provide rental car insurance for damages due to collision or theft.
