I want to buy a UK National Lottery ticket using my debit card but I don't want my bank to hold this against me - I don't want to ruin my credit report. Am I right to worry about this?
Six years ago I heard a story on US public radio which resulted in an article, Credit Card Big Brother
To summarize, the credit score might not be directly impacted, but the issuing bank doesn't like to see lottery tickets, retreading tires, cash advances, hookers/strip joints, booze in large quantity.
In my opinion, the data mining has gotten out of control. But the original story really got me thinking.
I don't think you need to worry about this for two reasons:
- National Lottery is the state lottery, and would hardly be considered "dodgy" activity.
- Data protection laws would forbid a bank releasing your bank account transactions to third parties - so they cannot report what you spend your money on to anyone without your explicit permission. Even the police need a warrant to get a look at your bank account transactions.
Credit agencies such as Experian can only collect information relating to your debts (including when you ASK for debt), but you have to give permission (usually a condition of borrowing).
I don't quite share the confidence of @Corone's answer that data protection laws would mean your bank couldn't share details of your transactions with credit reference agencies - they already get an awful lot of latitude to share information without your consent
However, I do know that as a matter of practice they don't do this. It's easy to check what's listed on your credit report by applying for a copy from the three reference agencies (CallCredit, Equifax and Experian) and you'll see that what they hold related to your spending basically amounts to a list of your accounts, the amount you've borrowed on each, and your record of paying on time.
There's some information on how the credit reference agencies operate on the ICO's website.
In theory the place you have your account might directly look at your spending in more detail if you apply for credit directly with them. Also, when applying for a mortgage with anyone they will ask for details of your outgoings, and you would be obliged to answer honestly.
However in both cases it's highly unlikely that a small amount of money spent on lottery tickets would cause any problems. If you have very large outgoings on gambling - e.g. amounting to hundreds of pounds per month - whether on the lottery or other kinds of betting, that might be a different matter.
Having worked for a UK retail bank for many years I can assure you that nobody cares about individual transactions on your account as long as they don't take you overdrawn, or have to be returned (bounced) etc. It certainly won't affect your credit rating.
The only issue might be if you were suspected on money laundering or some other illegal activity, that would then get escalated via the relevant channels, but even that wouldn't get near to affecting your credit rating.
In the UK there is legislation that forces any bank employee into reporting suspicious activity.