Does Online Gambling Affect Credit Rating?

These days your credit score is as much a part of you as your name, your profession, and your status. As soon as you become a bill-paying, house-buying, car-driving adult, then your credit score becomes a significant part of your life and one that will dictate every decision that you make.

There are a lot of things that can negatively impact this score, from applying for loans, to opening new bank accounts, credit cards and more. But what about online and offline gambling? There are some theories out there that suggest gamblers are looked down upon by credit agencies and that gambling has a directly negative impact on a person’s credit score.

How much of this is true? Can gambling affect your credit rating?

Online Gambling and You Credit Rating

Online gambling in all of its forms has no direct impact on your credit rating. You can gamble at online casinos, sports books and more without it impacting your credit rating. It doesn’t matter what you have heard on financial and gambling forums; online gambling does not affect your credit rating.

Offline Gambling and Your Credit Rating

As with online gambling, there is simply no direct way for offline gambling to reduce your credit score. This is true whether you are gambling with cash at a sports book or racetrack, or you’re using your card to gamble in a casino.

The credit agencies do not report on such issues as they have no access to this data. So, gamble freely.

Why This Myth Exists

Many myths are born out of fear and paranoia, and that’s the case here as well. But there is more to this myth than that. Gamblers often struggle to get credit and this, in addition to their activity online, leads them to believe that their activity is being monitored and having an affect on their credit rating.

But there are several factors at play here. Firstly hardened gamblers tend to do other things that impact their credit rating (as discussed below) sometimes without realizing it. Secondly, there is a certain level of anger and frustration that stems from being rejected for major purchases, and this can result in annoyed rants and conspiracies.

If you look at it logically, it wouldn’t make sense for gambling to affect your credit rating. This is a common, popular activity that is often enjoyed responsibly. Not only that, but who would benefit from it affecting your credit rating? The banks and lenders might have something to gain and would no doubt like to know about problem gamblers, but for this knowledge to get to them, they would either need gambling sites to report on who uses their sites and how much they win/lose, which is simply not in their interests, or they would need to trawl through a user’s bank account/statement to find all gambling transactions, which is highly unethical and probably illegal.

How Gambling Can Affect Your Credit Rating

There are some exceptions to what we discussed above. These may not relate to every gambler, but they are worth noting nonetheless as they can seriously impact your credit rating if you fall into one of these groups:

  1. Credit Card Gambling

There are times when it makes sense to use your credit card to gamble. After all, it’s safe, secure, and it has a lot of anti-fraud measures, so you can use it freely on sites that you’re not 100% confident in, knowing that if anything happens and they steal your money, you can always claim it back.

However, a credit card should not be used to gamble money that you don’t have. This is a trap that problem gamblers often fall into, and it results in them accumulating massive amounts of debt.

The average adult has a credit limit that equates to around 3 to 6 months of what they earn. Once you include interest payments, bills, food, and other costs of living, a debt of that size could take years to pay back, leaving an individual in serious financial distress, and yet this is an issue that many gamblers find themselves in after letting their habit get away from them.

This can have a serious impact on a person’s credit rating, an impact so severe that there may be no coming back from it.

  1. Loans and Credit

Credit cards are not the only way to gamble with money you do not have. Everything from payday loans to PayPal Working Capital can and have been used to gamble. Some gamblers take out these loans to fund a bankroll and take up professional poker or blackjack, assuming that they can win enough to cover interest payments, repay the loan, and then enjoy the profit, but gambling is not a guarantee, and as a result thousands of gamblers just end up digging themselves further in debt.

If you take out a large loan that you then blow at the tables or on the slots, then not only do you have a lot of extra debt, but you have nothing to show for it—nothing that you can sell, no collateral that you can give back. It’s not like a car loan or a mortgage, where non payments will result in repossession. You have nothing, and this is why gambling with credit often cripples individuals financially.

  1. Bank Decisions

If you gamble a lot and lose a lot, then your bank or card provider might be less inclined to lend you more money. They don’t necessarily dig through your statements to determine how and where the money is going, but only because they don’t need to.

If you are earning $5,000 a month and $4,000 of that is going towards non-essential items, then that will raise serious red flags within the bank’s algorithm. It won’t necessarily impact your credit rating, at least not directly, but it will impact on the bank’s future decisions and may stop them from increasing your overdraft or credit.

If you contact them directly and ask them to increase your credit, then they will ask a serious of personal questions and may also look more closely at your bank statements. If they discover that you are gambling an amount of money that is disproportionate to your income, then they will likely think twice about offering you credit and will more likely offer you financial guidance.

  1. Mortgage Decisions

It’s also worth noting that some mortgage lenders will ask to look through your bank statements to make sure you can afford to make the repayments. In doing so, they will likely notice if you have been making substantial payments to gambling companies. Unless you are a professional poker/blackjack player, they may even disregard any income you make from these sites, as it’s the risk factor they will be concerned about.

This will not show on your credit report though and not all mortgage companies do this.

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