The question of whether or not betting affects your credit rating was not really an issue until the age of online betting. Many moons ago, we’ll call it “back in the 90s”, real people went into real shops and made real bets with real cash. Coins and even notes, if they were real players. Nowadays, however, the vast majority of bets are made online and many of those are made using debit cards. Such bets leave a clear electronic footprint and lots of punters have queried whether or not betting affects their credit rating.
Credit ratings themselves are now very much an online phenomenon as well, with all sorts of data being plugged in to decide whether you can have that mortgage, car, 90-inch UHD TV or even just a monetary loan. It is easy to understand why punters might worry about the impact of betting on their credit rating and here we explain all you need to know about the issue.
Will Betting Stop You Getting a Mortgage?
Perhaps the biggest concern some regular gamblers have is whether their online betting is going to have an impact upon their ability to get a mortgage. It would be a shame to lose your dream home over a 12-fold Championship acca (that fell at the first hurdle with the Friday night game anyway!), so let’s look at this issue first.
Most recreational punters are not placing enough bets or staking enough money in total for it to have any real impact at all. In fact, the whole question of betting and credit ratings probably arose due to the growth of matched betting and related advantage betting techniques. If you aren’t familiar with these terms, basically they are ways of using free bets and other betting offers, as well as other “tricks” to more or less secure a net win from your bets.
Typically, people using these tactics will be placing lots of bets, often with very high stakes. If all goes to plan, from this large turnover they will make a small and steady net win. However, the fact they are placing so many bets, with so many different sites and betting a large amount of money in total, could obviously appear concerning to people who work for financial institutions (or their algorithms). Even though the account would, in theory, be showing a general trend of winning rather than losing money, it is easy to see why a lender might be worried about such extensive betting activities.
No But Yes But No But Maybe
The traditional answer to how this would affect one’s ability to obtain a mortgage was that it wouldn’t. Gambling transactions were not said to affect your credit rating and, more to the point, lenders would often never be aware of the activity in the first place.
However, following the global financial crisis in 2008, a lot of changes were made to the mortgage approval process and stricter criteria were introduced. A lot of these focussed on affordability and entailed banks wanting and needing to see precisely what potential customers were spending their money on and how much they were spending.
This would often mean banks pouring over bank statements and, once again, it is easy to see why repeated deposits to gambling companies would ring alarm bells – even if they were more than offset by withdrawals back into the bank. Of course, anyone showing substantial losses would be even more of a red flag for lenders.
Ultimately, gambling will not affect your credit rating per se, but it may impact your ability to obtain credit, be that via a mortgage, a car finance deal or anything else. The Mortgage Advice Bureau state that “generally speaking, gambling and mortgages do not mix well” and that if banks “see that you’re an active gambler, then this may go against your application”.
Problems with Gambling & Getting a Mortgage
Most people will not see their gambling affect their chances of securing a mortgage. Quite simply, the chief concern of a lender is that you can afford to pay back the loan and you are not a risk of defaulting. If your main bank account shows the occasional £20 deposit here, £50 there and even amounts larger than that, as well as the odd credit from a bookie, online casino site or other betting company, that is unlikely to be an issue.
Naturally much will depend on how much you earn but from a lender’s perspective, there is not too much difference between someone who spends £200 a month on their recreational betting and someone who spends the same amount on clothes, nice restaurants or trips to the pub. As long as your incomings comfortably exceed your outgoings, allowing for the mortgage, you should be fine.
Potential lenders will typically look back at your statements for the past three to six months, though possibly up to a year or even longer. The Mortgage Advice Bureau state “the lender is not going to judge you on what you choose to spend money on” and adds that “if you’re betting using your own money, and you aren’t in debt, then this shouldn’t affect your mortgage application”.
Red Flags
However, there are times when gambling will affect things and broadly speaking these fall under the following categories:
- You are losing a lot and it is affecting your ability to pay the mortgage
- You are falling into debt due to your gambling
- You are a pro- or semi-pro punter and gambling is your only or main source of income
The first two issues on our list are closely related but subtly different. In the first instance, your gambling may not be such a big issue but it could be that your regular outgoings are too close to your earnings for the lender to be confident that you can afford the mortgage.
In the second instance, they are also worried about affordability but the situation is worse because your gambling is actively getting you into debt. Gambling funded by credit cards is no longer permitted in the UK but there is no way for a betting site to prevent customers depositing using loans, an overdraft or separate savings (the latter source of funds would not really be debt but would generate the same concerns).
The mortgage lender would probably be able to see this quite easily from looking at your bank statements and such gambling is sure to give them major doubts. What’s more, any borrowing will show up on your credit report and could begin to negatively affect your credit rating directly if it is not properly managed.
The final issue, that of professional gamblers, may seem counter-intuitive. If banks and building societies are cautious about punters who lose too much, surely the ones that win should be welcomed? However, this is not the case and effectively professional gamblers, be they those making straightforward wagers or those using some of the betting techniques mentioned earlier, are viewed as self-employed – at best.
Self-employed people are typically viewed as a riskier proposition than those who are employed by another company as so many small businesses fail and there is less security in general. But professional gambling probably takes that risk even further, at least in the eyes of a lender. They may, wrongly, believe you are reliant on luck but even if they understand the fact is that even the very best pros can sometimes experience bad losing streaks.
Someone with a regular nine to five job knows that at the end of the month they will take home £x. If a professional gambler has a particularly bad month then not only might they take home a lot less, they could actually take home a negative sum. This is to say they could lose money overall and be forced to use savings or their betting bankroll to pay for food, day to day costs and, of course, the mortgage they haven’t yet got!
As with self-employed borrowers, lenders may still decide to agree to a mortgage with pro gamblers but with stricter terms applied. Most commonly, such loans will only be available to those with bigger deposits and the interest rate may be higher as well.
What Should Gamblers Do to Protect Their Credit Rating?
As we have already implied, by “credit rating” we probably really mean “creditworthiness” because the actual score should not be impacted. Either way, there are certain things that any concerned regular punters can do to try and improve their chances of securing whatever credit they want.
The simplest and most obvious thing to do is to have a separate bank account that you use solely for gambling and that is as far away as possible from your main current account. This is definitely the best approach for semi-pro gamblers, matched bettors and those who have a primary, non-gambling source of income.
That way you can simply show any would-be lender your main, “clean” account with a regular income and manageable outgoings. Of course, if you are losing large sums those funds will have to come from somewhere so that in itself may create its own difficulties. If you are losing a lot, or just more than you are comfortable with, we strongly suggest you visit the BeGambleAware site or one of the other similar bodies.
Returning to the issue of keeping a separate bank account, this should work brilliantly for those who are just smaller, recreational gamblers and want to be extra careful. Equally, for those who are betting huge amounts and/or betting very regularly, and generally making a net win (or at least only losing an affordable amount), such a tactic will avoid any issues with future lenders.
Digital challenger banks, such as Monzo and Revolut, are perfect for this, although you can use any bank really. Equally, e-wallets and other payment solutions are options, although note that some bookies exclude such wallets from offers and promos.
Professional Gamblers & Mortgages
If you are a professional gambler then the suggestion above will not work as your “main” account would only show outgoings and transfers from your gambling account. These inbound transfers would be queried as the bank would need to know the source of your funds and how secure that was and then, of course, you are back to square one.
So, what can a pro, or just someone who makes a net win from gambling and wants to use those gains to support a mortgage application, do? Well, as said, you should be able to find a mortgage by being 100% open and transparent about what you do. However, the terms of your deal may not be quite as good as an employed person with the same income.
Use a Broker
There are a few things you can do to try and get the best deal possible though and the first of those is very simple: use a mortgage broker. A broker will know which lenders are best for self-employed people, which have accepted gamblers before and which are definite no-nos, which should save you a lot of time and effort.
Brokers usually make most of their money directly from the lenders at no extra cost to you. Some charge an extra fee on top of this but if you ask they may waive that assuming the value of the mortgage is reasonably high (as this will mean their commission is also substantial).
Proof of Earnings
The second thing to do is to offer as much proof of your “earnings” as you can. If the bank sees you have made a loss one month and a net win in three months, they are far less likely to lend you money than if you show sustained gambling success over several years. Self-employed people often need to show three years of their businesses’ income and if you can show that, and even more, you should be in a decent position to secure a reasonable loan.
That is especially the case if your net win has stayed steady, or, ideally increased. Equally, if you can demonstrate that you have savings to cover any possible spell of losses, or you can just use those savings to reduce the size of the loan (by increasing the deposit) you should increase your odds of getting a competitive rate.
Credit Rating & Gambling Conclusion
Gambling of any form does not directly affect your credit score but it may affect your chances of securing a loan, finance agreement or mortgage. Requiring loans or overdrafts, or in the past credit cards, to fund gambling will show up on your credit report and potentially harm your score.
The more common issue, especially for a mortgage application, is that the bank will become directly aware of your gambling. Their affordability checks mean they will view at least three months of bank statements. Very regular gambling, especially if it is resulting in losses that could affect your ability to pay off a mortgage in the future, is sure to be of concern.
The best way to avoid these issues is to keep your gambling sensible, responsible and, relative to your earnings and other outgoings, affordable. In addition, separating your gambling from your main finances by using a dedicated card and account for the former is wise.
Pro- and semi-pro gamblers are advised to provide as much proof of long-term, sustainable income as they can – ideally, at least three years. In addition, increasing your deposit, showing proof of savings and using a mortgage broker to easily find a lender who may approve such a loan are all advised.