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Credit Score: Does online gambling affect getting a mortgage?

October 19, 2020
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It’s one of the most common urban legends circulating mortgage applications. Your best mate’s uncle's neighbour has a friend who was turned down for a mortgage because he had used a betting website. The explanation is simple enough; banks don’t want to lend to people who might have irresponsible spending habits. But is there any truth to the myth? And could a flutter on your favourite team get in the way of your hopes of homeownership?

The truth is, yes, gambling websites on your bank statements can make lenders nervous. And when coupled with other factors, this can be enough to see your mortgage application rejected. It isn’t as simple as a single betting transaction making it impossible to secure a mortgage, but it is something to consider if you are hoping to get on the property ladder.

How do lenders detect gambling?

When you submit a mortgage application, you will be asked to provide 3 months of bank statements. Underwriters will examine these for signs that your earnings and expenses match what you have stated. This is all part of the process for ensuring that your mortgage is affordable.

They are trained to look for the signs of regular gambling, and they may see this in regular transactions to common betting websites.

When does betting not matter?

If you bet small amounts here and there, the lender is unlikely to care about these transactions. When your betting is within your spending money and you aren’t using a credit facility to place the bets, this doesn’t ring any alarm bells to the lender. But if you also have poor credit, a history of late payments, and you’re placing large deposits in online gambling websites that are outside of your budget, this is a different story.

Lenders are only concerned with risk

Just like a gambler, lenders are only concerned with making sure they don’t lose money. To do this, they have to assess the level of risk involved with backing one borrower over another. If one person regularly deposits money into a gambling account, and the other puts their money into savings, then it’s easy to see which borrower will be more attractive to lenders

One of the biggest factors that will deter lenders is borrowing money to place bets. This means you should never be using betting websites when you are in your overdraft or place a bet using a credit card.

You are free to gamble with your earnings, but only if this is money you have in the bank, not money you’re borrowing from the bank. Most people live in their overdraft and don’t see the distinction between their money and the bank’s money, but this isn’t the kind of behaviour that lenders want to see.

Does my credit score show gambling?

Your credit score is not linked to any online gambling, so lenders will not be able to see that you are gambling from your credit score alone. However, if your credit score is poor, you make payments late and your lender can see evidence of gambling on your bank statements, these factors will all add up.

Will gambling debts impact my ability to secure a mortgage?

Any debt will impact your ability to secure a mortgage, and gambling debt is no different. If you now have your gambling under control and are working towards paying off this debt, this shouldn’t be flagged as an issue. It would be difficult for lenders to see the source of the debt, so provided you have stopped making deposits to gambling websites, there is no reason to disclose this.

How can I increase my chances of being approved?

Lenders want to see that you are responsible with your money and make payments on time. In the months running up to your mortgage application, keep your spending in line with your stated expenses. You should also avoid making any credit applications, as these will show as hard searches on your credit report.

Even if you aren’t a regular gambler, a lot of people like to avoid any sense of doubt by stopping gambling for the three months before an application. You could use a secondary bank account, like a Monzo account, if you want to participate in gambling but don’t want this to show up on your bank account. (Note that transfers to other bank accounts in your name might raise just as many questions, so it could be better to avoid it entirely.)

Lenders aren’t looking for reasons to rule you out, but they are responsible for more stringent affordability checks. If your mortgage is affordable and you are feeling confident, you should do everything in your power to keep your spending in check to ensure there is no reason to doubt your application. And stopping gambling is one way to give lenders extra confidence.

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