Does Online Gambling Affect Your Credit Score?
If the latest sports betting site or casino is in your sights, perhaps you are feeling lucky.
Or, maybe you saw a lucrative gambling site promotion that you want to take advantage of. However, you might question, how does online gambling affect your credit score?
Gambling will not necessarily impact your score. However, before opening a casino line of credit, there are risky moves you should avoid that could negatively harm your credit or get you into hot water with your creditors.
Can Online Gambling Affect Your Credit Score?
The short answer is no. Wagering does not directly affect your score, but it can indirectly if you go into debt.
Because no one can afford to keep losing, it might help to explore financial planning tips some gamblers use.
How Can You Gamble Online Without Hurting Your Credit Score?
There are ways to sensibly make wagers online without falling behind on your bills, which can negatively hurt your credit score.
These tips include:
Never Chase Losses
Betting with your emotions will cost you. Do not place additional bets directly after a loss. Here is an example.
You bet $300 and lose it. You then bet $300 more to try to win it back, but you lose that wager, too. You are now down $600 instead of $300.
If you can afford to gamble when you want, set a weekly or monthly gambling budget.
Base it on your income and set a limit. Then, instead of haphazard bets, use a betting strategy:
- Big Losses Strategy: This is betting that a team that suffered a big loss will win the next game as a comeback.
- Blowout System: This wagers on an underdog (57.5%) if the home favorite (42.5%) won by 15-points or more.
- Martingale System: Like the D’Alembert System, double your bet if you lose but return to your initial wager if you win. Albeit, it will not work if you are on a losing streak.
- Tunnel Betting System: Bet the over and under with different bookmakers. You may end up with only a small net loss.
Gamble Within Your Means
Online casinos and sportsbooks accept credit cards to fund online accounts but avoid asking your bank for additional lines of credit.
While tempting to chase jackpots or sure wins, you are racking up more debt. You may also place too many hard inquiries that can negatively impact your credit.
When using credit cards (for rewards points), a better plan is to limit the amount you put on your cards. And pay your cards off in full each month.
Know When To Stop
Pay attention to the signs that will tell you when it’s time to stop gambling.
If you start borrowing money to gamble, miss bill payments, or default on loans, it is a sign you need to stop.
Here’s what else to avoid:
- Taking out casino credit, same-day loans, or cash advances: Cash advances include high interest rates and fees that can add up. If you cannot pay back a casino credit (markers), they can sue you or send debt collectors after you.
- Applying for bank loans or more credit: This is another no-no. Credit card balances should stay at 10-30%, or your credit utilization ratio will go up and adversely affect your report. Missed payments can also negatively impact your score as payment histories make up 35% of your score.
- Looking for other money sources: This might include relying on overdraft protection. Or you might ask friends and family for money.
Understand How Credit Impacts You
If you have good credit, do not take out more credit for your gambling bankroll. You may get some good offers if you search for loans with a soft credit pull.
Hence, with good credit, you might receive several offers. However, can you responsibly pay the payments on time?
Lenders might also do hard credit searches, which can hurt your score.
If you cannot make loan obligations on time, talk to your lender. Ask for a payment plan or consider debt consolidation.
If you default on your loans, lenders may report your delinquencies to the three credit reporting agencies (Experian, Transunion, Equifax), which can worsen your credit score.
They can also sue you in court for your outstanding balances.
Know Your Credit Score
Each lender has scoring methods to determine creditworthiness.
Hence, a good credit score makes you eligible for credit at lower interest rates because you have proven that you are responsible with debt.
These are fixed loans you pay back over set periods. Examples include mortgages and personal and auto loans.
These are limits where you borrow and make flexible repayments. Examples include credit cards and overdrafts.
Based on Consumer Reports data, credit scores range from 300 (poor) to 850 (excellent):
- 800+: Excellent credit
- 740-799: Very good credit
- 670-739: Good credit
- 580-669: Fair credit
- 579 and lower: Poor credit
Most consumer scores fall in the 600-750 mark. Get a free credit report annually and monitor your credit.
Pay your bills on time each month, avoid going over your credit limit or paying bills late, and gamble responsibly.
Take The Season Off
Sitting out one season from all betting can help you wean yourself from gambling on every game or sport. And it gives you time to get caught up on bills.
During your break, keep up with your favorite teams (IRs, other news).
That way, you come back stronger next season!
Understand Bankroll Management
To help you understand how to manage your bankroll, let’s say you have $3,000 after taxes every month.
After paying $2,000 in bills on time, you have $1,000 (disposable income).
Do not bet the entire amount but consider setting aside $500 to gamble with over a month.
Use The Flat Bet Formula
Using that same $500 from above, take 1% of your bankroll or $5 wagers for each game. However, casinos and sportsbooks might have a minimum bet of $25.
So, let’s say you wager $25 on each game. That is 20 games/month. Want to add more games? Bet in smaller increments or space them out further.
USE THE KELLY FORMULA
It is a handicapping strategy for more favorable odds. Let’s say the Steelers are the favorites at 1.9 or -111 in moneyline odds over the Cowboys. 1.9 odds means the Steelers have a 52.6% winning chance.
You would handicap the game at 1.8, giving the Steelers a 55.6% chance.
With the Kelly Formula, b = 1.8 – 1 or 0.8, p = 0.55.6, q = 0.44.4. The formula is:
- 0.8 x (0.556–0.444) / 0.8 = 0.112 or 11.2%
Hence, you would bet 11.2% on the Steelers. The drawback here is that handicapping requires math.
CONSIDER THE THREE D’S
You can use an app like Mint or You Need a Budget (YNAB) to help you pay your bills on time (and have money to gamble with).
If you are overwhelmed by debts, look for information on the three D’s: debt counseling, debt consolidation, and debt management. These can help you develop a plan to pay down your debts each month.
As you pay your bills off, reward yourself with a small wager or two. But only after you pay your bills.
How to Deposit Safely At A Gambling Site
Select A Gambling SiteFrom your computer or mobile device (with private wifi), select one of our best online sportsbooks.
Click on the “Sign Up” or “Join Now” button.
Create Your User AccountFollow the instructions and create a new user account and password, and confirm your account.
Refresh your email screen or look in Spam if you do not see the verification email.
Visit The CashierSelect the “Cashier” or “Bank” option to load your account with money.
Payment methods might include credit/debit cards, wire transfers (banks, Moneygram, Western Union), e-Wallets (Skrill, Neteller, Paypal), prepaid or gift cards, and cryptocurrencies.
*Note: Cryptocurrencies and credit cards let you gamble instantly and make withdrawals faster. Other methods can take longer.
Choose Your Welcome OfferChoose a casino or sportsbook welcome bonus. For Bitcoin offers, visit a cryptocurrency exchange to convert cash into Bitcoin.
After receiving your Bitcoin online wallet, go back into the gambling site and select the offer.
Read the terms and conditions for every offer so you will know the wagering requirements (5x-40x).
Verify Your AccountVerifying your account makes it easy when you are ready to cash out your winnings.
Add any data the site needs to verify your account (ID, utility bill, bank statement). Hence, only use our secure betting sites.
Start Gambling Safely & Responsibly
Online gambling will not affect your credit score if you bet responsibly. While you can load your account with a credit card, avoid pay-day loans, lines of credit, and chasing losses.
These can lead to you falling behind on your bills and create a recipe for disaster. Hence, set a limit/budget or use a betting strategy and stick to it.
Gambling is much more fun when you can wager – and walk away.