As the European Championship continues in full swing, concerns about the rise in gambling also continue to be raised by experts.
Football tournaments are notorious for attracting a rise in betting and gaming, with the National Gambling Helpline reporting a 5% rise in calls during the 2018 World Cup competition.
When it comes to your finances, gambling can have an impact on whether banks and lenders offer you a line of credit and hinder the process of getting loans, mortgages and car insurance.
Along with car finance provider Zuto, we have put together a list of things to consider before placing a bet.
Betting could be considered a form of irresponsible spending and seeing gambling transactions on your financial records could be enough to make lenders nervous.
Frequency of gambling
UK finance companies are adopting Open Banking more than ever before, and research suggests over 64% of the population will have adopted the service by next year.
For gamblers who authorise Open Banking when applying for credit, this means lenders will have a broader snapshot of income and expenditure.
Although there are no set rules, and every lender operates differently, there are a few different factors that are regularly reviewed if gambling transactions are flagged in your financial history:
- Frequency of gambling activity
- Amount(s) spent on gambling
- Frequency and Amount versus your current balance and income
Underwriters want to see that there are no signs of financial distress relating to gambling activity when they are reviewing, to make sure they have full confidence when lending money that the loan will be repaid.
Risk indicators
Lenders typically look at a list of ‘risk indicators’ when deciding whether customers can afford to be borrowing money or not. These include:
- Unarranged Overdraft Usage
- Returned Direct Debits
- Debt Collection Agencies Relationships
- Gambling Activity
- Recent Borrowing
- Payday Loans
If customers have more than one of the above factors, this will likely affect their chances of being approved for a loan.
Getting a mortgage
A person who frequently gambles large portions of their income and has a bank statement with a pattern of high-risk spending could find it difficult to get a mortgage.
Frequent payments to gambling companies could make you a less appealing prospect than an applicant who makes regular deposits into savings instead.
Lenders might consider how much you are gambling in relation to how much you are earning, therefore small weekly payments towards the national lottery for example could be totally acceptable.
For gamblers who are worried about applying for car finance with bad credit, or are looking to improve their credit score to increase their chances of being approved for a loan, Zuto has published a guide here.
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