If you like a flutter, there’s a good chance that you’ll spend at least some of your time wondering whether or not doing so is likely to affect your credit score. If you’re the sort of person that is hoping to buy a new house, say, or get a car, you’ll be keen to ensure that your credit score is as high as possible. Will that be put at risk if you choose to place a bet on the Grand National? The short answer is ‘no’, but it is worth beating in mind that some bookmakers will perform a soft check on your ID, but it won’t affect anything for you.
In recent years, a decision has been taken to stop people from using credit to gamble. That is a process designed to stop people from getting themselves into extreme debt in order to place bets, as well as avoid people having their credit score affected as a result. That doesn’t mean that gambling can’t affect your credit score in other ways, of course, such as if you were to use loan money to place bets and find yourself in financial trouble as a result. Any decisions you take that involve money can make a difference to your score.
What Is a Credit Score?
Before we get into the long grass of looking at whether or not gambling is likely to affect your credit score, it is worth taking a moment to at least explore what a credit score actually is. In short, a credit score is a way of a lender being able to tell how much risk your represent before they give you any money. This can be literal money, such as getting a loan or mortgage, or it can be money in the sense of letting you have a car that you pay off over time, say. If you don’t have a good credit score, lenders will be wary of working with you.
Whilst the obvious concern is that this will stop you from getting a mortgage to buy a house a loan to do home improvements, for example, the reality is that even letting agents and landlords will do a credit check before allowing you to buy a house, to say nothing of smaller things, such as being able to get a mobile phone contract. This is why having a good credit score matters, because it tells these various organisations that you are a responsible person who can be trusted to pay back what you owe over time.
Gambling Doesn’t Affect Your Credit Score Directly
The good news is that gambling in and of itself will have no material affect on your credit score. Gambling is, in its purest form, no different to any other pastime that you or your friends and family might have. Someone who chooses to spend £150 buying tickets for a football match or a concert doesn’t worry about their credit score when they do so, so it stands to reason that someone choosing to place a bet with their money should also be able to do so without any concern for what it means to how they’re viewed by lenders.
In fact, the fact that you are gambling is all but irrelevant in terms of your credit score as the information will not even appear on it. That is because your credit score is made up of information about you as a person and what your borrowing habits are. Have you taken on excessive debit? Have you failed to pay back money owed to the companies that you’ve borrowed it from? That is the kind of thing that your credit score will tell the various companies that want to know about it, rather than what you spend your money on.
Indirectly, It’s a Different Story
Whilst the very act of gambling will not show up on your credit score or make any difference to how you are viewed by lenders, that doesn’t mean that it can’t make a difference to your credit score if your finances get out of control as a result of your gambling. If you were to use a credit card to take money out at a cash point, say, or transfer money into your bank account and then use that money to gamble, that runs the risk of making a dint in your credit score. That is especially the case if you fail to pay it off.
The same sort of thing is true if you were to go into your overdraft in order to use money to gamble or you were to use money that you’d received as a loan so that you could place some bets. The second that you use money that is intended for one thing for something else, you get yourself into a position where your credit score might end up being affected as a result. Using £100 of your overdraft to place a bet is fine in and of itself, but if you lose that bet and can’t pay the money back then things become very different.
Why Mortgage Applications Are Different
Though your credit score will not be affected by gambling in and of itself, that doesn’t mean that you’ll be free and clear of gambling being an issue for lenders when you’ve been able to keep your score looking nice and healthy. There are numerous different companies that will want to see more than just your credit score before deciding whether or not to lend you money. The best example of this is when you apply for a mortgage, with the majority of lenders wanting to go through your bank statements with a fine-toothed comb before giving you any money.
Most lenders want to be confident that they’re going to get their money back before they agree to give it to you, based on the fact that you can afford to make your repayments. Is it affordable for you as a person to make the payments back to a lender on a regular basis? If not, they will avoid lending you anything for fear of being left having to chase you to get the money back that you owe. How much you want to borrow will dictate what sort of information it is that they’re going to request before making their decision.
If you’re looking at getting a mobile phone contract that costs £10 per month, for example, then a quick look at your credit score will almost certainly be enough to satisfy most companies. If you want £200,000 to buy a house, on the other hand, the mortgage provider is going to want to take a much closer look at what it is that you spend your money on. At this point, they are likely to ask to see your bank statements, usually from the past three to six months. They will look at your transactions and see what they can discern from your activities.
If you tend to spend a few quid a week placing bets, all of which is entirely affordable for your from your incomings, this won’t set off any red flags. If, on the other hand, you are regularly spending £1,000s on making deposits with gambling companies and get into your overdraft on a regular basis, this will cause them some concerns. One in five people in the United Kingdom gamble on a regular basis, so the act of placing a bet will not be a major issue. It is how much you bet, how often you do it and whether it becomes unaffordable that will be what they look for.
Can You Avoid Lenders Finding Out That You Gamble?
Knowing that gambling itself doesn’t affect your credit score is one thing, but figuring out whether it is possible to stop lenders from even knowing that you tend to place bets is something entirely different. In this day and age, there are numerous options open to people that are hoping to avoid a lender finding out that they gamble regularly, with eWallets being an obvious such example. Companies like PayPal can work as an intermediary between your bank account and your betting company, keeping things nice and clean.
You make a payment to your eWallet of choice and then use that to pay the betting company, thereby removing yourself from the risk of a lender seeing how often you make payments for gambling. Of course, the problem is that a lender can just as quickly ask to see the statement of your eWallet, which they’re likely to do if you’re making regular payments from your current account to your eWallet. It will stop the immediate risk of your gambling transactions showing up, but it is unlikely to stop them from finding out altogether.
Behave in a Fiscally Responsible Manner
You might well ask yourself why it is that gambling is seen as a negative thing by lenders. Even those with high credit scores may be viewed as being high-risk by lenders if they have a history of regularly gambling. This becomes even more likely if you tend to use a high proportion of your disposable income to place bets. The reason for this is that you are, factually, more likely to lose than win if you gamble. There is no argument on that front, given that casinos, bookmakers and bingo sites, to name but three, are set up that way.
The only way of being sure that you won’t lose money through gambling is to not place any bets in the first place. The rest of the time, the longer you gamble for, the more likely you are to lose money. Lenders aren’t in the business of losing money, so they do what they can to mitigate their risk. Whilst you might feel as though you are perfectly in control of any gambling that you do, a lender is unlikely to see it that way and is perfectly entitled to just refuse to lend you any money if they fear you might end up putting it at risk.
Red Flags for Lenders
There are numerous things that will be immediate red flags to lenders, with the idea of using money that you have borrowed in order to place bets being really high on that list. You are not allowed to use loan money to gamble, for example, and wouldn’t have been loaned it in the first place if you had said that that was what you were going to use it for. Similarly, you cannot use credit cards to gamble and it is frowned upon if you use an overdraft to do so, meaning that you’ll have to have lied about your intentions if using that money for gambling.
If you’re hoping to stay on the right side of lenders and keep your credit score in the best possible shape, the most important thing that you can do is to behave in a fiscally responsible manner. That means not using credit to place bets, nor fail to make repayments on credit that you have been given by a lender. You should only use as much money as you can afford to lose when gambling and do not get yourself into a situation where you find yourself throwing good money after bad when you inevitably lose your bets.
Though there is no limit on how much you can spend on gambling before you begin to cause alarm bells to go off with lenders, the reality is that you need to make sure that you can always afford anything you lose. Lenders understand that gambling is a popular pastime and people with always engage in it, so they will just want the reassurance of knowing that you are able to gamble in a fiscally responsible manner before they let you borrow large sums of money from them.