The simple answer is yes; gambling can most definitely hurt your credit score. Even if you have the necessary capital to fund your gambling, more often than not, you are financing your gambling habits with something that is credit score dependent: most commonly, a credit card (confused about your credit score? Read this article to learn more). Although there is no clear link between gambling in itself and credit scores, needless to say, if you are an avid gambler, there is a good chance you are playing with fire.
Taking a Gamble with Your Credit Score
Your credit score standings and financial standings are two different things. Your credit score only shows how responsible or irresponsible you are with your credit accounts. You could have a great credit rating with barely any savings. Although a compulsive gambling addiction is very damaging in all respects, the havoc it can wreak on your credit score could be even worse and follow you around long after you’ve stopped gambling.
Credit Rating and its Effects on your Livelihood
As a credit card holder, your priority should be to paying your statements on time, because once your credit score is damaged, fixing it can prove to be very difficult. There are two (among many) significant limitations you put on yourself with a bad credit rating. One, you probably will not be able to qualify for large purchases, such as leasing a car or buying a home. The second, which is often overlooked, are your employment opportunities. About fifty percent of employers will pull up your credit card history to do a background check before hiring. And this applies to credit card holders of all ages.
Want more information on how to protect your credit report? Click here.
Gambling, Credit Score, and Potential Bankruptcy
Something that will likely lower your overall credit score is opening multiple credit card accounts. This kind of activity is very common among compulsive gamblers. It’s not uncommon for compulsive gamblers to use one credit card to pay off other cards. This will likely just make your financial burden larger because you’ll more than likely incur higher interest rates. There is also often a delay between the onset of compulsive gambling and the time when your credit score is affected. While their credit score is still healthy enough, gamblers often borrow more than they can ever repay. This cycle of behaviour often ends in bankruptcy.
Gambling and High-Risk Populations
There are multiple reasons why people gamble. Less serious cases are often for entertainment and recreation and more serious cases are often to deal with the psychological changes and stressors of our day-to-day life. One high-risk group would definitely be young online gamblers who very often fund their gambling habits using credit cards. The second population would be compulsive and problematic gamblers. People from this group gamble compulsively and find it very difficult to stop. The results can be devastating when someone with these tendencies borrows thousands of dollars.
Watch this video to learn about how your credit score is calculated.
Casino Credit: Avoiding Bad Credit
When going to a casino, there is a way to borrow money with less risk of damage to your credit rating. Casino credit isn’t like personal loans or credit cards. Casino credit is different in that the credit is not approved by credit card companies but rather by the casino itself. This way you have a fixed amount of credit and you don’t need to walk around with cash in your pockets. You’ll have to provide the casino with specific personal information and they will then provide you with a credit instrument which you use at the tables to gamble. It is like post-dating a cheque and borrowing money from yourself, it’s your money but you can withdraw it within a certain window of time.
Being Cautious with Casino Credit
Although casino credit is a far safer route, there are still precautions that should be taken. For example, when you apply for casinos credit, you give permission to the casino to check your credit. Now, this can actually hurt your credit scores. Applying for the casino credit could lead to an inquiry on your credit report; these inquiries could hurt your credit score. Depending on how much credit you were approved for, you are given a period of time to repay the casino or cash in your markers. You still have to be very cautious because if you do not make your payments, casino operators are allowed to pursue your funds.
Stop Online Gambling Addiction
If you’re gambling and consistently putting yourself further into debt, the first step is to acknowledge you have a problem and seek help. This is somewhat idealistic, considering many people with addictions can go years before acknowledging and then taking steps to better their situation. Ironically, many people with a gambling addiction only stop once they’ve exhausted all their possible funding options. Luckily there are many avenues a compulsive gambler can take to kick the habit. If you feel as though you might have a gambling issue we suggest that you seek professional help right away.
Please visit The Canadian Centre on Substance Abuse website for information on gambling addiction.