Do Betting Companies Perform Credit Checks?

credit report illustration credit checksIf you’ve signed up to a betting company, you might be concerned about what this means for your credit score. As you will probably know, any time your credit is checked, your credit score can be affected. This can mean that you struggle to get something like a mortgage or other important thing on credit.

The good news is that betting companies only perform a soft check on your credit, which doesn’t have any affect on your credit score. They often also check the electoral role, in order to ensure that you live where you say you live.

In other words, signing up to place bets with a company online shouldn’t have too much of an affect on your credit score. That doesn’t mean that it is a financially sensible thing to do, though. You always need to make sure that you only ever place bets with money that you can afford to lose. Even then, you should do your research before you place a wager, given that placing uneducated bets is one of the quickest ways to get yourself in financial trouble. The best bettors are clever in how they approach the wagers that they place.

Credit Checks & Betting

credit scoreMany people are always concerned about their credit score. Whether you’re hoping to buy a house, looking to buy a car on PCP or need good credit for some other reason, there are plenty of ways in which you need to be careful when it comes to what your finances say about you.

It is not uncommon for people joining a new betting company to be concerned that some form of credit check will be carried out, potentially having a negative impact on that credit score. The good news is that there is no hard credit check on you personally.

Since April of 2020, it has been illegal for gambling companies to accept credit cards as a method of payment for deposits. This means that there is no credit involved in gambling if you’re doing it with a company that is licensed by the United Kingdom Gambling Commission.

There is a chance that that they will perform a soft check, but this is done simply to ensure that you are the person that you say that you are. The UKGC requires betting sites to fulfil Know Your Customer criteria, in order to avoid money laundering and other issues.

Things That Can Affect Your Credit Score

man looking at poor credit score rating onlineJust because gambling companies don’t carry out hard checks on your credit score doesn’t mean that your credit score can’t be affected as a result of placing bets. There are numerous influences on your credit report, with the main ones being as follows:

  • Your payment history on things such as credit cards and loans
  • How much of your available credit you’re using
  • How much your owe on credit
  • The length of your credit record
  • Whether you have a mix of credit being used
  • Any hard credit checks that are carried out on your account or new lines of credit that are taken up

Though gambling as an activity doesn’t fall into any of these categories, it can still affect your credit score depending on how you behave because of your gambling habits. Imagine, for example, that you place bets with money that you can’t really afford to lose, none of the bets are winners and suddenly you need to pay some bills. You take out a credit card to do so because you don’t have any other available cash, over-extending yourself. This is the sort of thing that will definitely show up on future credit reports.

That being said, neither your bank balance nor what it is that you spend your money on will show up on your credit report. As a result, as long as you are being fiscally responsible and only placing bets that you can afford to, gambling as an activity in and of itself won’t cause you any problems when you’re looking to get a line of credit. That means that it won’t affect a your ability to take out a credit card, as long as you’re being sensible with your betting and your money and not going into debt.

If you are gambling a lot, however, and have a lot of transactions going through your bank, even though this may not affect your credit score it could be a negative signal for things like mortgage applications where lenders will ask to see statements.  It often doesn’t matter if you are withdrawing more than you win, how successful you are as a bettor is less important to finance companies than how often you gamble and how many transactions you make.

It is worth considering how much you gamble and how many transactions you make prior to applying for loans as this could influence whether you are accepted or not and potentially the rates they will lend to you (i.e. the risk bracket you are placed in).

Think About Other Areas Of Your Life

bank statementThere are countless reasons why it is really important to be sensible with your betting. Spending money that you can’t afford to lose will always get you into trouble further down the line. This is especially the case when you think about the fact that ‘the House always wins’ isn’t just some trite expression.

Bookmakers and casinos are set up in such a way that they are all but guaranteed to take money from you in the long run, so short-term wins are not wins overall if you’re planning to keep gambling for a long period of time.

Just because the act of placing a bet doesn’t affect your credit score, your score will soon begin to be affected if you are unable to pay other bills due to the money that you’ve spent gambling. Going into arrears on payments such as your mortgage or rent, for example, will be flagged up on your credit report.

Though gambling itself won’t have directly caused you any problems, it will be an indirect cause of problems if you don’t manage your finances properly. Equally, taking out credit or using the likes of a pay-day loan company to pay for things will cause issues.

Credit utilisation, which is the posh phrase for the manner in which you use your available credit, can also have an impact on your credit report. Say, for example, that you have a credit card with a £20,000 limit and you’ve borrowed £19,000 on it, lenders will not look favourably on you because of that. If, on the other hand, you borrow a small amount regularly and always pay it back, lenders will consider you to be fiscally responsible. This is a method that should only be considered if you can trust yourself to pay the credit off every month, though.

Questions You Might Want Answered

Question Mark Problem Solving ThinkingThere are numerous questions that you might have around gambling and credit checks, even aside from the idea of whether or not your credit report will be damaged by you signing up with an online betting company. One of the things that you might want to know, for example, is whether it will show up on your credit report if you make use of your bank’s merchant code blocking service. It is possible that your bank might be able to stop you from spending money with betting companies, which is useful if you have a gambling problem.

The good news is that only your bank will know which blocking codes you’ve made use of, so that’s something that you don’t need to worry about. If you’re someone that has a problem with gambling, you might be concerned about how long into your recovery it will be before you can do something like apply for a mortgage. Once again, there is some good news there, insomuch as the fact that you’ve had problems with gambling in the past doesn’t necessarily mean that you won’t be able to get credit in the future.

The issues arise if you’ve done something such as missed a payment or defaulted on your credit accounts in the past. When that happens, you are unlikely to be offered the market’s best rates for the likes of a mortgage, with defaults lasting for six years and diminishing with every passing year during that time.

Unfortunately, if you have joint credit agreements, such as a joint mortgage with someone, both people on the agreement are liable for any any debts. Lenders can check the credit of the person that you’re financially linked to, if you apply for credit.

Why Does It Matter?

high medium and low riskThe truth of the matter is that lenders don’t want to lend money to people that have demonstrated irresponsible financial behaviour in the past. In other words, if you’ve got yourself into debt using credit cards or other forms of credit, it will show up on your credit report and will influence whether you can get credit again in the future. Lenders don’t care that you’ve gambled as an activity in its own right, but they do care if placing bets has resulted in you getting into trouble when it comes to making payments that you owe.

Ultimately, lenders will look at your outgoings and your earnings, though not necessarily the specifics of the former. That is to say, a lender will look at something like the amount that you spend every month and compare it to how much you learn. Someone on a salary of £500,000 a year spending £1,000 a month on gambling won’t be flagged up as being a concern, but someone on £20,000 a year spending that much will be. It’s why you need to be sensible with your financial responsibilities, being careful not to over-extend in order to gamble.