Q: What does your credit score and online compulsive gambling have in common?
A: Both are largely dependent on your ability to borrow money.
Gambling is not like that, and often a downward spiral can continue unchecked for a long time. Especially if large amounts of debt are involved, it can seem as though there is no other option. If you have self-harmed or had suicidal thoughts or feelings, it is really important to seek professional help as soon as possible. Jun 11, 2019 Gambling is the latest target of banks in the new world of mortgage lending, as many lenders are now questioning betting habits great and small. Mortgage brokers are warning prospective home.
I was just wondering about how regular gambling activity affects a mortgage application? Presumably not good. Over the course of a month I may have 10-15 transactions to online gambling sites like SkyBet or PaddyPower totalling £100-£160. My take home pay is around £2,200 - £2,300. The primary concern of the lender is that you aren’t getting yourself into debt by funding your gambling. If you’re gambling using your own money and you’re not in any debt, then this is unlikely to have an impact on your mortgage application.
Can you gamble away your credit score?
You betcha. Even if you have the financial means to fund your online gambling habit, more times than not, you are using some sort of electronic funding option that is credit score dependent, such as a bank’s credit card. But the long term consequences of a poor credit score are staggering, even if you are not addicted to online gambling. More here on how online gambling can affect your credit rating. And a section for questions about credit and online gambling at the end.
Gambling away your credit score
Like it or not, an individual’s credit score is not an indicator of wealth or financial security, it only indicates whether or not you are good at borrowing money, and paying it back. But the lingering effects of bad credit may last longer and affect more life changing decisions than a compulsive gambling addiction. So who is at risk of ruining credit? And what can you do about online gambling problems? We explore here.
What is credit rating?
Simply put, not paying your credit cards bills on time will drastically lessen your credit score. And once your credit score is damaged, the fix is not simple. The most obvious effect of bad credit is the lost ability to qualify for any type of major purchase, or additional credit including an automobile, rental apartment or a home. Another effect often overlooked, about half of employers are pulling credit information to consider individuals for employment. This includes employer’s in the private sector, public sector and even military. The most shocking part of this scenario, is this is happening to individuals in their 20’s, or even younger.
How gambling affects your credit score
Often compulsive gamblers can open numerous credit card accounts. This action in and of itself will lower your overall credit score. Then, you can get into the cycle of using one credit card to pay off the debts of other credit cards. Generally, each subsequent credit card balance transfer is tied to a higher interest rate, increasing financial burden.
And what’s more is that compulsive gamblers commonly lie, cheat or steal to continue fueling their gambling addiction and feeding the credit cycle. This cycle is not easily broken, and often times ends up in bankruptcy. Additionally, there is typically a lag between the time problem gamblers begin an actual financial meltdown, and the time when credit score actually takes a hit. This lag gives gamblers the opportunity to continue borrowing money and get even deeper in debt.
High risk online gamblers
Why do gamblers gamble? Either for recreation and entertainment, or to avoid and cope with the emotional or psychological stresses of life. But who is particularly at risk of ruining a good credit score?
1. Young online gamblers – Unfortunately, younger gamblers (those ranging from 18 years of age to 25 years of age) almost exclusively use credit cards to fund their online gambling expenditures. Seemingly harmless at first, the act of funding your gambling habits using a credit card can lead to devastating results.
2. Compulsive/Problem gamblers – The danger of credit card funding of gambling is most frightening for those who are either at risk problem gamblers or who exhibit symptoms of compulsive gambling. “Compulsive gambling”, or “pathological gambling”, as psychiatrists label the behavior, is defined as an inability to stop gambling. When you combine an inability to control ones actions, with the immediate access to thousands of dollars, the results are often disastrous.
How to stop online gambling
The best thing for gamblers who are driving down the road of bad credit from a gambling addiction, is to seek help. However, due to the nature of addictive disorders, it may take many years for a gam0lber to realize they have a problem and even longer for individuals to take the proactive steps to take control of their problem. In fact, the point of realization normally occurs when a compulsive gambler can neither fund their gambling nor make payments on the debts owed. But help is out there. Cognitive behavioral therapies can help gamblers manage compulsive thinking in combination with lifestyle changes and support groups. You can also block online gambling sites to self monitor your use. Or you can seek professional help with a counselor who specializes in treatment compulsive gambling.
Online gambling and credit questions
Do you have questions about your credit while gambling online? Please ask here. We try to answer all legitimate questions with a personal and prompt response.
Despite what you may have heard, mortgage advisors don’t spend their spare time sitting in a lair somewhere, stroking their beard while devising reasons why you can’t have a mortgage.
In fact there’s a lot of myths out there about what lenders are looking for. Here’s five things that won’t actually ruin your mortgage application.
1. Occasionally gambling or spending your money on stuff you don’t need
There’s a lot of information out there that suggests that any gambling is an absolute no-go, but spending the odd tenner on the races or on what will happen in the Christmas episode of Eastenders isn’t a big deal.
Gambling is an issue only if it’s frequent, if you place bets you can’t afford, or if your mortgage advisor thinks it might impact your mortgage repayments.
The same goes for spending money on ‘silly’ things. We all do it, so go out and have a good time! Just make sure to follow your budget and to do it all in moderation.
2. Applying for a mortgage on your own
Let’s get it out of the way: yes, it is possible to get a mortgage on your todd. However, there are certain considerations, the big one being that your mortgage amount is relative to your income. If you’re in a partnership or are married and want a mortgage, your income is combined.
The deposit is also a lot easier to save up if you’ve got a lovely other half to help out. That said, your mortgage application won’t be rejected because you’re applying on your own.
Online Gambling Affect Mortgage Interest
3. You don’t know what your credit rating is
If you’re a fan of spending but you’re not too good at keeping track of your repayments (sure the money comes out of your account at the end of the month – no bother!), a bad credit rating can impact your application.
Hop over to the Irish Credit Bureau and you can apply for a credit report online for only €6. If your credit rating is on the negative side, make sure to tell your mortgage advisor as soon as possible so you’ll have no financial skeletons waiting to jump out of your closet.
While not knowing won’t cause issues, a bad credit rating will have to be taken into account – but we reckon that’s fair enough!
Online Gambling Affect Mortgage Payments
4. Having a messy paper trail
When you go into your mortgage meeting, the ideal scenario is that you’ll have your documents organised and in tip-top shape. You’ll be able to show your mortgage advisor how much you’ve saved each month, how you spend your money, and how good you’ll be at meeting your mortgage repayments.
While that certainly helps things along, a messy paper trail isn’t the end of the world. Incase your paperwork has disappeared to the same place as all your matching socks, these are the documents you’ll need to bring to your mortgage meeting:
PAYE employees
• Photo ID
• Proof of address
• P60 (or 3 months consecutive payslips)
• Certificate of income
• Bank statements for the last 6 months
Self-employed
• Photo ID
• Proof of address
• 3 years audited/trading accounts
• Confirmation of your tax position
• 3 years Revenue Notice of Assessment
• 6 months business current account statements
5. Being in negative equity
Negative equity happens when the value of your house is less than the amount you owe on your mortgage; if you sold your house, you wouldn’t be able to fully clear your mortgage.
A lot of Next Time Buyers think that being in negative equity means they won’t be able to get another mortgage, but that’s not true.
With Negative Equity Home Movers, you can transfer the outstanding balance to a new loan on your next house. As with most second houses, you can decide whether to trade up or down (finances pending).
Thinking of applying for a mortgage?
Whether you’re a first time or next time buyer, EBS has options to suit you. If you want to buy a house or you’re considering trading up or down, try our mortgage calculators or book a 30 minute mortgage meeting now!
EBS d.a.c. is regulated by the Central Bank of Ireland.
The content of this blog is expressed in broad terms and is limited to general information purposes only. Readers should always seek professional advice to address issues arising in specific contexts and not seek to rely on the information in this blog which does not constitute any form of advice or recommendation by EBS d.a.c.
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