Many people have been using credit cards to gamble and to get a loan. One thing you will want to know all about is the credit rating. It means how able you are to pay back the money you have obtained from a lender, a bank in this case. Both loans and gambling can affect credit rating. But which one is worse? Well, the answer is not as simple as you may believe. We will need a lot of time and effort to explain all of the things we would like and the ones you need to know.

Gambling And Credit Rating

Credit cards are common. In the United States, for example, over 79% of people have a credit card. The situation is similar in the United Kingdom, where people prefer to use credit cards for gambling. Some of these people are gamblers on casino operators with credit card payments and use the card to fund their casino accounts and gamble. You may believe that these transactions will have a huge, negative impact on your credit rating and you will have issues when using a credit card for this purpose. Not exactly.

A bank cannot see nor are they really interested in what you are using the money with a credit card. As such gambling in this form will not impact your credit rating. You can make as many transitions as you like and the bank will still approve and allow you to use credit cards more and more.

The only thing you need to remember is that if you fail to pay the money back to the bank it will affect your credit rating. It will have a huge, negative impact and the rating will be seriously decreased. As such, you won’t be able to use the money more and as such, the credit rating will be massively decreased. On the other hand, if you pay back the money the credit rating will stay the same which is great.

A problem here is that some gamblers will use a lot of money via credit card hence paying back the money can be hard and if a player has a gambling addiction, impossible! What this means is that paying back the money to the bank will be problematic and your credit rating will suffer.

Keep in mind that using a credit card for this purpose comes with a high-interest rate of up to 25% and also an advance fee which is typically between 3% and 5%. This makes paying back the money you have used for gambling harder.

Some gamblers would like to know will the use of credit cards for this purpose decreases their odds of getting a mortgage. If they worry about it, they always remove gambling spending using simple options that are available today. This is possible if you decrease your credit rating. If you use a credit card for gambling on a regular basis and you have issues paying back the money, your odds of getting a mortgage will be lower.

Loans And Credit Rating

Loans will affect credit rating more than gambling at first. It will be affected the first time when you get a loan and it can be decreased. If you fail to pay back the money, your credit rating will be even more affected! You need to know that it may be impossible for you to get an additional loan or a second credit card.

However, if you pay back the money on time, you will restore the credit rating perfectly and there won’t be any issues. We can deduce that credit rating will be decreased for a short period of time. We can add that loans you have paid back in time will boost your credit rating.

Credit rating is determined by a couple of factors. Here are all of them that will help you understand how all of this works and how you can keep a credit rating higher than ever before. In general, credit rating is determined by FICO and it looks like this.

• 35% comes from your repayment past
• 30% is based on the total amount of debt
• 15% comes from the length of your credit history
• 10% is based on a new account or a new debt
• 10% comes from the credit mix

As you can see the biggest percentage comes from the ability to pay back the money to the bank. This means that you can pay back the loan and the bank will give you another, hence your credit rating will go up. Exceptional credit rating is 800+ while the poor start at 580. There are 5 categories here.

The Final Word

In a nutshell, loans and gambling with a credit card won’t affect your credit rating significantly but only if you pay back the money on time. Worth to mention, recently some restrictions were implemented regarding credit card spending on casino sites and now many people even do not need to worry about it. If you fail to do it (it is more common with gamblers) credit rating will be decreased. On the other hand, loans can decrease the credit rating in the short term or they can help you improve it if you pay back the money on time! The bottom line is that gambling or loans won’t have a huge effect on credit rating if you keep your payments organized and you don’t spend more than you can pay back.