Does Online Gambling Affect Your Credit Rating
3 reasons why you should follow us on social media. Win special prizes in quizzes every week 2. Win no Does Online Gambling Affect Your Credit Score deposit bonus vouchers funded. Does online betting affect your credit score if you're still paying back regularly? I'm 21 years old, and have a pretty healthy credit score that I want to keep for my 30s when I'll need it most. I have never bet or gambled online or otherwise since I find it risky/irresponsible. The first is that betting will not have any impact on your credit rating, it is accepted that many people place bets for enjoyment. However, the second factor is key, and that is that if you show signs of being an irresponsible gambler, even if you don’t consider yourself to be one, then this could have an effect on your credit rating. The casino credit line is dependent upon your credit history and the 30 to 90 day average available cash in your checking account. Most casinos will check your credit rating with one of the three major credit bureaus (Experian, Equifax, TransUnion). These checks will show up on your credit report as an inquiry. Most of these online gambling sites accept credit cards as a form of payment and with a few clicks, you’re given more gambling credits. This makes it very easy to rack up charges on your credit card as you chase an online jackpot. This practice could be disastrous to your credit scores.
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It can be helpful to think of your credit scores as a pie that represents your financial well-being.
Your pie is divided into slices, each of which represents a different factor that goes into your credit scores. One large slice is your open credit card utilization rate, another is your percentage of on-time payments, another is the length of your credit history and yet another is the number of derogatory marks on your credit reports.
And then there’s a tiny slice that represents your hard credit inquiries. Every time you apply for more credit, you take a small bite out of this slice. But what exactly is a hard inquiry, how does it differ from a soft inquiry and how much of an effect does it really have on your credit?
Let’s start with the basics.
What is a hard inquiry?
Hard inquiries (also known as “hard pulls” or “hard credit checks”) generally occur when a financial institution, such as a lender or credit card issuer, checks your credit when making a lending decision. They commonly take place when you apply for a mortgage, loan or credit card, and you typically have to authorize them.
A hard inquiry could lower your scores by a few points, or it may have a negligible effect on your scores. In most cases, a single hard inquiry is unlikely to play a huge role in whether you’re approved for a new card or loan. And the damage to your credit scores usually decreases or disappears even before the inquiry drops off your credit reports for good (hard credit checks generally stay on your credit reports for about two years).
That doesn’t sound so bad, but you may want to think twice before applying for a handful of credit cards at the same time — or even within the span of a few months. Multiple hard inquiries in a short period could lead lenders and credit card issuers to consider you a higher-risk customer, as it suggests you may be short on cash or getting ready to rack up a lot of debt. So consider spreading out your credit card applications.
How many hard inquiries is too many?
The effect of a hard inquiry on your credit scores ultimately depends on your overall credit health. In general, adding one or two hard inquiries to your credit reports could lower your scores by a few points, but it’s unlikely to have a significant impact.
Having a lot of hard inquiries within a short time frame though will likely have a greater impact on your scores. This is because lenders — and in effect, credit-scoring models — look at multiple credit applications in a short amount of time as a sign of risk. Though there can be exceptions when you’re shopping for specific types of loans, like car loans, student loans or mortgages.
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Learn more about minimizing the effect of hard inquiries below.
What is a soft inquiry?
Soft inquiries (also known as “soft pulls” or “soft credit checks”) typically occur when a person or company checks your credit as part of a background check. This may occur, for example, when a credit card issuer checks your credit without your permission to see if you qualify for certain credit card offers. Your employer might also run a soft inquiry before hiring you.
Unlike hard inquiries, soft inquiries won’t affect your credit scores. (They may or may not be recorded in your credit reports, depending on the credit bureau.) Since soft inquiries aren’t connected to a specific application for new credit, they’re only visible to you when you view your credit reports.
Will checking my own credit scores result in a hard inquiry?
No. This is reported as a soft credit check, so it won’t lower your scores. You can check your VantageScore 3.0 credit scores from two major credit bureaus, Equifax and TransUnion, for free at Credit Karma as often as you like without affecting your credit scores.
Examples of hard and soft credit inquiries
The difference between a hard and soft inquiry generally boils down to whether you gave the lender permission to check your credit. If you did, it may be reported as a hard inquiry. If you didn’t, it should be reported as a soft inquiry.
Let’s look at some examples of when a hard inquiry or a soft inquiry might be placed on your credit reports. Note: The following lists are not exhaustive and should be treated as a general guide.
Common hard inquiries
- Mortgage applications
- Auto loan applications
- Credit card applications
- Student loan applications
- Personal loan applications
- Apartment rental applications
Common soft inquiries
- Checking your credit score on Credit Karma
- “Prequalified” credit card offers
- “Prequalified” insurance quotes
- Employment verification (i.e., background check)
Keep in mind, there are other types of credit checks that could show up as either a hard or soft inquiry. For example, utility, cable, internet and cellphone providers will often check your credit.
If you’re unsure how a particular inquiry will be classified, ask the company, credit card issuer or financial institution involved to distinguish whether it’s a hard or soft credit inquiry.
How to dispute hard credit inquiries
We recommend checking your credit reports often. If you spot any errors, such as a hard inquiry that occurred without your permission, consider disputing it with the credit bureau. You may also contact the Consumer Financial Protection Bureau, or CFPB, for further assistance.
This could be a sign of identity theft according to Experian, one of the three major credit bureaus. At the very least, you’ll want to look into it and understand what’s going on.
Does Online Gambling Affect Your Credit Rating Scores
Keep in mind, you can only dispute hard inquiries that occur without your permission. If you’ve authorized a hard inquiry, it generally takes two years to fall off your credit reports.
How to minimize the effect of hard credit inquiries
When you’re buying a home or car, don’t let a fear of racking up multiple hard inquiries stop you from shopping for the lowest interest rates.
FICO gives you a 30-day grace period before certain loan inquiries, like those for mortgage or auto, are reflected in your FICO® credit scores. And FICO may record multiple inquires for the same type of loans (again, like mortgage and auto) as a single inquiry as long as they’re made within a certain window. This window is typically about 14 days.
While some lenders can rely on scoring models that give you more time to shop without incurring an additional hard inquiry, you may want to stick to 14 days to do your comparison shopping, since you likely won’t know which scoring model a lender relies on to generate your score.
Next steps
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Your credit scores play a big role in your financial well-being. Before applying for credit, take time to build your credit scores. With stronger credit, you may improve your chances of being approved for the financial products you want at the best possible terms and rates.
Avoid applying for multiple credit cards within a short amount of time. While one hard inquiry may knock a few points off your scores, multiple inquiries in a short amount of time may cause more damage — unless you’re rate-shopping for a home or car, in which case you’ll likely have a grace period to shop around.
To help you keep track of hard inquiries that may influence your credit scores, check your credit reports from Equifax and TransUnion at Credit Karma.