Does Online Gambling Affect Your Credit Rating?
From the number of times this question has been asked on various forums, you can tell that this is a big concern for many gamblers. While there is no clear link between credit rate and gambling, there seems to be a myth than no matter how much you play, the moment you engage in online gambling, your credit score will suffer. In this article I will give you some facts about what actually does matter in your credit ranking and how to make sure you keep a good score when you are a gambler.
What is Credit Rating?
A credit score is essentially a number that represents how reliable a person’s financial responsibility is. Most countries have an official body that collects financial data on individuals, which can then be requested in the event that person is looking to get a loan, rent a house, get a certain type of insurance, etc. Since this score shows a person’s financial health and credibility, most lenders like banks or credit card companies look to this number to decide the interest rate, whether a loan should be approved, or what terms to impose on a credit card or loan request.
Which Factors Affect Your Credit Rating
Spending your money where you wish seems like it should be no one’s business, but you may be wondering if online gambling affects your credit rating. There are a variety of factors that can impact your credit score. If you are looking to keep credit rate clean, make sure to pay attention to these factors:
Payment History
When banks or other lenders give you a loan, the main factor for them, is if they will be able to get it back from you. Your history of making payments on time, whether for your credit card, or a phone bill, helps keep a clear credit rate for you.
How Much You Owe
You may think if you have no outstanding payments, that would be good for your credit score. In reality, if you have no revolving credit, meaning the lenders can’t see how you handle borrowed money. To show a clear credit rate, it is also important to show that you have a mix of various types of credit so the lenders can see how you handle various types of credit responsibly.
Your Credit History Length
The age of your oldest and newest credit accounts and how long you have been using the accounts, are also taken into consideration when determining your credit score. A long credit history is helpful, unless it is impacted by a negative track record of late payments.
New Credit
Another factor that gets looked at when determining your credit score, is whether you have many new accounts, when it was opened and if you have various outstanding amounts on several new cards. If you do, it could be indicative of having cash flow problems, and can serve as a red flag for lenders.
Now taking these into account, you need to know that not all your personal data is going to impact your credit score or your effort to keep credit rate clean. Things like your marital status, your salary, your family support obligations, or receiving any government assistance.
Do Banks View Gambling as a Negative Factor?
Clearly there is social stigma associated with gambling so some lenders may feel nervous if they know you gamble occasionally. Many believe when looking at your financial history, it is gambling vs credit score. In reality however, your credit score is not directly impacted by how you spend your money. If you make payments on time and have a good standing with your financial institution, you have very little to worry about.
However compulsive gamblers are known to use one credit card to pay off other credit cards. This will almost certainly increase your financial load because you will be subjected to higher interest rates.
How Much You Can Gamble Without Affecting Your Credit Score
If you gamble sensibly, do not spend a major portion of your income on gambling, and do not have a history of losing your money, property, or other substantial asset, you have nothing to worry about.
How to Keep a Good Credit Score
Pay Your Bills
Paying your bills on time, whether they are for your phone bill or making credit card payments, will ensure that you are keeping a good score.
Keep Old Credit Cards Open
Closing your credit cards reduce your available credit, and since you need to keep a good balance for all credit available to you, closing an old card reduces your limit. Closing old cards also removes them from most credit reports and reduces your credit age.
Plan for Your Debt
Loan balances and lines of credit also impact your score. Make sure you have a plan to maintain a good payment schedule to return the amount you owe.
Keep Your Credit Card Balance Low
Your credit score will suffer if your credit card debt is higher than your credit limit. Most financial advisors say in order to maintain a decent credit score, keep your aggregate credit card balances under 30% of your total credit limits.
Conclusion
There are a variety of factors impacting one’s credit score. From debt to credit ratio, length and history of credit, to opening new lines of credit and showing activity on them, lenders look at your fiscal responsibility when checking your credit score. Gambling alone is no cause for concern for your credit score or to keep credit rate clean. However, demonstrating a lack of control when gambling, by borrowing to play, or playing while your payments on bills or debt is suffering, doesn’t only lead to a negative score, can also lead to bankruptcy and loss of income.
Some gamblers, myself included, believe that gambling online responsibly can be good for building better money management skills. I believe you don’t have to choose between gambling vs credit score.
Remember the worst thing you can do for your credit score is to borrow money to gamble with. In the end, always gamble responsibly and in moderation and there will be no ramifications, financial or otherwise.
About The Author: John Duncan is a web operation executive at CannonBet. Born and raised in the cybersecurity world. He authors guides on cybersecurity and safety and loves sharing the best practices. You can contact the author via email.