Euro 2020 betting could affect your chances of borrowing money, experts warn
As the European Championship is in full swing, experts also continue to worry about the increase in play.
Soccer tournaments are known to attract an increase in betting and gaming, with the National Gambling Helpline reporting a 5% increase in calls during the 2018 World Cup competition.
When it comes to your finances, gambling can impact banks and lenders offering you a line of credit and hamper the process of getting loans, mortgages, and auto insurance.
Together with auto finance provider Zuto, we’ve put together a list of things to consider before placing a bet.
Betting can be viewed as a form of irresponsible spending, and seeing gambling transactions in your financial records can be enough to make lenders nervous.
Frequency of play
UK financial firms are adopting Open Banking more than ever, and research suggests more than 64% of the population will have adopted the service by next year.
For players who allow Open Banking when applying for credit, this means lenders will have a broader view of income and expenses.
While there are no set rules and each lender operates differently, there are a few different factors that are regularly reviewed if gambling transactions are reported in your financial history:
- Frequency of play activities
- Amount (s) spent on the game
- Frequency and amount compared to your current balance and income
Underwriters want to see that there is no sign of financial distress associated with the gambling activity when they examine, to ensure that they have full confidence when lending money that the loan will be paid off.
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Lenders typically look at a list of “risk indicators” when deciding whether customers can afford to borrow money or not. These include:
- Use of unordered overdrafts
- Returned direct debits
- Relations with collection agencies
- Play activity
- Recent loans
- Payday loans
If customers have more than one of the above factors, it will likely affect their chances of being approved for a loan.
Get a mortgage
Someone who frequently gambles a large chunk of their income and has a bank statement with a high-risk spending pattern might have difficulty getting a mortgage.
Frequent payments to gambling companies might make you a less attractive prospect than a candidate who makes regular deposits into their savings instead.
Lenders may consider how much you gamble versus how much you win, so small weekly payments to the national lottery for example might be quite acceptable.
For gamers who are worried about applying for auto financing with bad credit, or looking to improve their credit rating to increase their chances of being approved for a loan, Zuto has posted a guide here.
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