Over the last few years, online betting has become wildly popular in many countries worldwide, and it has certainly shaken up the US gambling sector. Whether it’s playing casino games at iGaming platforms or wagering at online sportsbooks, lots of people now like to bet over the Internet.
One thing many wonder is whether betting online can have a negative impact on your credit score. This is a particular concern when we hear about iGaming company ElectraWorks Limited having their payments show up on bank statements (as reported by the CasinoMeister blog).
But can betting online harm your credit rating or not?
Can Online Betting Have a Bad Effect on Credit Scores?
The simple answer is that online betting does not directly have a negative impact on your credit score. This is because gambling activities (be it playing online casino games or placing sports bets digitally) do not show up on your credit report and are not taken into account when deciding your credit score.
Due to this, you should be able to play casino games or bet on sports online without any negative consequences for your credit score.
What Does Go Into Your Credit Score?
Although the above shows that betting online is not something that is used to decide your credit score directly, you may wonder what companies who draw up your credit report do consider. The major factors they take into account are
- Payment history—do you normally pay your bills and current debt payments on time?
- How much do you owe on current loans/debt, and how much of your available credit have you used?
- The length of your credit history and your credit mix.
- Any new credit accounts taken out and recent hard credit inquiries.
As this shows, online betting gains or losses are not something the major credit firms bother looking at. This is even truer when you remember that credit bureaus do not usually look at income/bank balances when deciding your credit score and so will not pick up on any betting gains/losses.
Online Betting and Indirect Impact on Credit Scores
Whilst it’s true to say that betting online has no direct negative impact on your credit score, some risky financial behaviors associated with this activity might. This is especially true if betting online leads you into sticky financial situations!
But what factors linked with online betting could negatively affect your credit score indirectly?
Missed Payments
If funds needed to pay bills or current loan obligations are used for betting online instead, this can lead to missed payments. This is something that gets reported to the firms who draw up your credit report, and it can, therefore, drag down your credit score. Account defaults that get sent to collections can also show up on your credit report and bring down your score.
Using More of Your Available Credit
If you start to use available lines of credit to fund your betting online, you will soon see you using up more and more of the credit that is available. High credit utilization rates have a negative effect on your credit score, and this means you should keep it below 30%. If you don’t pay off any lines of credit used to fund gambling quickly, this can also have a disastrous impact on your credit rating.
Cash Advances
People who use cash advances from credit cards to fund online betting can soon rack up expensive fees and charges. Fees on cash advances, for example, tend to sit in the 3% to 5% range! When you also add interest onto the amount borrowed, it’s easy to see how using cash advances to fund online betting could lead to financial difficulties. If this then leads to missed credit card payments, it will show up on your credit report and bring down your credit score.
How Can You Avoid Online Betting Impacting Your Credit Score Indirectly?
The best way to do this is always gambling responsibly online and never betting with money you don’t have. By sticking to this mantra, bettors are able to avoid risky financial behaviors (such as cash advances on credit cards or betting with money they need for bills), which could negatively drag their credit score down.
Of course, gambling responsibly online is also a wise move in general and helps to keep betting fun. Most online betting platforms now have a range of tools to aid safer gambling, and these are worth using if need be. If you still find that your credit rating is low after implementing safer gambling practices, it’s worth looking at tips to improve your credit score.
Online Betting and Credit Scores
The main takeaway from this article is that online betting will not negatively impact your credit score directly. This is because credit bureaus don’t take this activity into account when deciding on your credit report and credit score.
It is true to say, though, that risky behaviors some people indulge in when betting online can have a negative indirect effect on their credit score. If you like to bet online but want to keep your credit score high, it’s wise to always gamble sensibly and never use the money you need for essentials.
