Thursday, 5 October 2017

Can Gambling Affect Your Credit Report? Really?

A good credit score is an indicator of how good you are in maintaining your credit worth or say, how good you are at borrowing and repaying your loans and credit balances on time. However those who abuse the credit facility to splurge such as for gambling or substance abuse can unfortunately greatly hurt their credit report. And that too with sky rocketing speed!
A credit report is the database of an individual’s complete credit history. It is an individual’s collective data gathered by Credit Bureaus which is used by lenders to verify the loan applicant’s financial condition. A credit report contains your overall personal information and credit account details. The credit history is one of the essential elements used in determining your credit score.

Let’s find out in detail how gambling affects the credit report in several ways.
Effect on Credit Score
Gambling is what’s called the game of luck and it can affect your financial condition through several expenses during the game. On some days, it can literally rip off your score. It can lead to bulk debit transactions on a single day. As a result, it puts a solid footprint on your credit report and ruins your loan eligibility at the same time.
Transaction Management
Every single entry on the credit report about money is known as the transaction. Through gambling, you can face few finance management problems such as duplication, missing some transaction entries in the credit report and more. A balanced money management is one of the factors needed to be considered for maintaining a good credit score.
Crossing Credit Limit
Several online gambling sites usually accept credit cards for payment, and within a few clicks, you will gain more gambling credit. But this practice can increase your credit utilization ratio. That’s how credit report gets focus for severe checkups through credit agencies. Generally lenders prefer less than or equal to 35 percent credit utilization ratio in an account as a balance. However to keep a track on the limit of credit during the betting session is generally not possible.

Hurts credit eligibility
The continuous habit of gambling for winning and making money can sometimes lead you to a bad financial situation. That’s why banks and other financial companies as a lender can also dismiss your loan agreement. Many lenders tend to reject your application owing to bad credit history due to gambling or other money pulling activities. With bad credit score, finding an interested lender becomes a very tall order. You would either not find a lender or would be bound to pay a very high interest rate on the loan.

Cash Advance like Payday Loans
In absence of adequate credit products, many resort to very quick short loans such as cash advance loans like payday loans. These loans come at a much higher cost and thus add more burden of repayment at the end of month.
Those who tend to bet for quick money are more inclined to borrow to finance their gambling activities. As an outcome, you have to put a significant amount of money as a balance on your credit card, and hence it will enhance credit utilization ratio. It is also a costly way to pay for cash, and it will influence your credit report as it is. Taking money in advance is not the right thing to do.
Bankruptcy
The word bankruptcy is originated from Italian remark “banca rotta” which means broken the bank. It is kind of legal action taken against an individual if he or she is unable to repay the particular debts on time to creditors.
It will only happen when you borrow plenty of money from the bank on loan for financing gambling with a promise to pay it back after some time and stumble upon your commitment. In case of repayment failure you tend to come under loan defaulter list and would thus ruin your credit worth for at least 7 years.

In a nutshell, gambling can ruin your whole life financially, and it would take many-many years to restore your credit situation. You would require a lot of perseverance and professional advice to get back on track!

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