Article by Richard Catlin - 22nd September 2021

Does Gambling Affect Your Credit Score?

If you’re among the 32% of Brits that gamble on a weekly basis and are thinking of applying for some form of credit in the near future, you might be wondering whether your activity could affect your Credit Rating and your chances of being accepted.

The answer isn’t a straightforward one unfortunately.

How ever you choose to place a bet, the record of you doing so isn’t directly reported to the UK’s Credit Reference Agencies, in much the same way that savings accounts, benefits or your salary aren’t.

Where it becomes slightly more complicated is if you use a credit card, rather than a debit card to fund your online account, or if you are about to apply for something that will involve a much closer examination of your personal finances and where you spend money, such as a mortgage.

Gambling using a credit card

If you use a credit card to gamble, most card issuers will treat each transaction in the same way as a Cash Advance, which means it will accrue interest from the point of borrowing, often attract a higher APR than your standard interest rate and in some cases will have a ‘handling fee’ loaded on top. In short, it can be an expensive exercise, even before you know the result of any bet.

It’s not just online gambling transactions that could be deemed as cash advances by card issuers either. In some cases, even buying food or drink in a casino will fall under the same ‘category’ and be subject to the same charges.

The added cost of a credit card transaction isn’t the only potential issue. That’s because increasingly it’s not just the balance, credit limit and any payment history of credit card accounts that will be disclosed to any lender searching your Credit Report. In some cases, the number of cash advances and the cash advance amount are also reported. Much like payday loans, lenders may interpret repeated cash advances as a sign of financial distress, which could in turn have a negative impact on any application and your ability to get credit.

Thankfully, single instances of a cash advance shouldn’t be an issue, so if you’ve ever accidentally used the wrong card at a cashpoint, you should be ok.

How will a lender view gambling transactions?

Your Credit Report and the information it contains will play a huge part in your ability to get credit - especially when it comes to ‘bigger’ financial commitments such as a mortgage - but it’s not the only consideration.

Affordability is also a critical factor. This essentially allows a prospective lender to assess whether you are likely to be able to comfortably afford to make repayments alongside your existing financial commitments.

Where most products with smaller monthly payments are concerned, lenders will usually be happy to rely on the information contained in your Credit Report to reveal your current borrowings, sometimes backed up with questions relating to your regular outgoings.

Given the size of most mortgages though, lenders will want to be much more certain that their level of risk is palatable and that there aren’t any nasty surprises lurking in your personal finances. This is the reason that you will be asked for between three and six months of bank statements alongside payslips and other paperwork – to allow a forensic analysis of where your money goes (and comes from) and to verify any information you provide.

Regular outgoings such as childcare, pensions, existing borrowing and other commitments such as child maintenance will all be taken into account, but gambling transactions (or unusual patterns of cash withdrawals) are likely to be subject to further questioning.

It’s important to remember that underwriters aren’t there to make a moral judgment. The odd gambling transaction shouldn’t cause a serious issue, but with the afore mentioned stat that one in three of us gamble weekly, it’s undoubtedly something that will be checked carefully. Ultimately, it’s the level of spending that will be looked at and how it compares to your income.

To be on the safe side, if you can avoid having obvious gambling transactions show up on your bank statement in the months immediately before making a mortgage application, you should. In some cases of course, that’s easier said than done, and if you are worried that it is becoming a problem, there is help available.

What your Credit Report does show

Whilst the impact of gambling on your ability to get credit is largely indirect, there are a number of elements within your Credit Report that will directly affect whether or not an application is accepted.

These include your payment history – and in particular any negative markers - as well as your presence on the Electoral Roll, any court information, and people you are financially connected to, to name but a few.

Until you check your Credit Report for yourself, there’s no way of knowing what is being reported about you, leaving you in the dark about what lenders, landlords or employers will see when they run a credit check.

To tip the odds in your favour before you make an application for credit, you can see what lenders will see and check what’s reported about you at all three UK Credit Reference Agencies in one place with checkmyfile. If you haven’t already, you can try us free for 30 days, then for just £14.99 a month afterwards, which you can cancel online at any time, or by phone or by email. Don’t leave it to chance.

Updated by Sam Griffin on 22 September 2021

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