Gambling is a popular pastime in the UK. Whether it is about placing a bet on the horses or wagering on the spin of the roulette wheel, the advent of the internet made gambling that much more accessible. Now, we’re not claiming that the internet is a new phenomenon, but what is new is the record number of people using online gambling as a source of entertainment.
Should you be worrying about your newfound hobby when it comes to your credit score? I am sure that we all have that distant uncle who heard that a cousin of a friends mothers wife swore blind that they got turned down for car finance because they gambled. Was this uncle talking any sense? Does gambling affect your credit score? Let’s take a look.
Before looking at whether gambling affects your credit score, it is probably worth having a quick look at what a credit score actually is. The first thing to know is that your credit score matters. It affects everything from getting a mobile phone contract to securing a mortgage for a house. That is why you need to keep your credit score healthy.
Your credit report is made up of information about you and your borrowing habits. It allows lenders to see if you manage your money responsibly such as not taking on excessive debt and ensuring that payments are made on time. The information contained in your credit report goes towards creating that magical number that is your credit score. This means that lenders don’t have to take a gamble when they consider lending to you!
The short answer is that it doesn’t. The longer answer is that it still doesn’t, although there could be an indirect impact. Your credit score and credit report are all about your habits when it comes to money that you have borrowed. Lenders will often like a little more information to minimise the risk to them, but they will not see any traces of gambling on your credit report. Why should you be penalised for a hobby? Does your cyclist friend lose a few points from his credit score or your neighbour whose hobby is taxidermy? Of course not, so why should gambling as a hobby be any different.
That’s the main point here in truth. Gambling is no different to any hobby. Any hobby can lead to irresponsible spending. This can turn into an addiction. The result can be a financial mess! If your gambling is controlled and there is the odd bet here and there no one is going to care. If your hobby becomes a habit and one that pushes you into your overdraft limit or forces you into borrowing more money, then yes it can wind up having a negative effect on your credit score. This impact is indirect though.
There will be no trace of your gambling on your credit report so you may be left thinking the question ‘how does gambling affect your credit score?” is slightly redundant. You know us by now and we’d never be posing such a question.
When it comes to gambling affecting your ability to borrow, this comes about when a lender asks to see your bank statements. Certainly, with a mortgage application, it is common for lenders to request three months worth. If these are full of transaction after transaction at casinos and bookies, this will ring alarm bells.
The takeaway here is that, like so many things in life, in moderation, gambling is perfectly okay. As long as you only spend as much on gambling as you can afford and it doesn’t make you dip into loans or overdraft. While gambling might not have a direct impact on your credit score, it can show up on your bank statements, which is something lenders often consider when deciding whether to give you money. So if you plan to take on some significant financing - like a mortgage or buying a car - maybe skip Skybet for a while.
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