New Member
Posts: 6
Registered: ‎05-12-2008

will refinancing a motorcycle from revolving credit to an auto loan improve my score?

I was wondering if you might be able to answer a couple questions I have pertaining to my FICO credit score…?  Until recently I had no credit score at all.  I would apply for credit cards so I could build credit – but it was a vicious cycle – I didn’t have any credit so no one was willing to give me a credit card.  Anyway, I ended up asking a good friend of mine to co-sign me for a motorcycle.  A couple weeks ago I signed up with and got my equifax FICO score and credit report.  My credit score is 638  It looks like the big problem (aside from the fact that the average age of my account is only 5 months…) is that this 7,500 dollar motorcycle is on my credit report as revolving credit.  I have learned that 30% of one’s credit score is based on their credit limits – and the ratio of my revolving balances to my credit limit is 89% because of the motorcycle!  So I’m wondering two things:  First, is it possible to refinance this motorcycle as an auto loan rather than have it reported as revolving credit?  And second, what would happen to my score if I did this?  I have two accounts total:  this motorcycle account from 7 months ago – and a credit card I was approved for in February.  It has a $0 balance now.  Anyway, don’t want to talk your ear off – was just hoping for some advice because I have no idea what to do about this!  638 is just terrible   

Senior Contributor
Posts: 3,071
Registered: ‎05-17-2007

Re: will refinancing a motorcycle from revolving credit to an auto loan improve my score?

[ Edited ]
Yep. Dramatic improvement changing it to an installment. There is no question that this as revolving is hurting your credit score. I would recommend that you do this. Be careful that your installment is not treated as a consolidation loan or consumer finance. Try a secured loan since it has lower rates using the bike as security and have the loan titled as AUTO. This will not only bring your score up but it will actually add points to your score. Lots. Good luck. Shop around for rates before you apply.

The funny thing is that you will still owe the same amount of money and just because you change the title you get rewarded with extra points after a few months instead of punished. Doesn't make a bit of sense does it?

Message Edited by ilovepizza on 05-12-2008 07:14 PM
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Epic Contributor
Posts: 28,115
Registered: ‎04-01-2007

Re: will refinancing a motorcycle from revolving credit to an auto loan improve my score?

Go check out your local credit unions for this. They usually have good rates on auto loans (and presumably bike loans), and most also offer credit cards. If you get yourself established with a CU, you can make some really good strides in establishing your credit profile.

And as pizza said, it will help to get the debt shifted from revolving to installment. BTW, 638 isn't bad at all for starting out!
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Mega Contributor
Posts: 17,456
Registered: ‎03-19-2007

Re: will refinancing a motorcycle from revolving credit to an auto loan improve my score?

I am a little confused.... If a good friend "co-signed" for you in buying  the bike, that implies to me securement of an installment loan, and not a revolving credit account.  Did good friend actually, in fact, sign with you as the co-holder of a new revolving account, and not as a co-signer on a loan?
I am not disagreeing with your statement that it is a revolving line of credit, I just dont understand what actually happened 
If it is in fact, a true revolving account, then I totally agree with what has been said above, for %util on a revolving TL counts much more than %util on an install TL against your FICO. 
And if the account is truly a revolving TL with good friend as co-authorized holder, then if he goes out and charges against your jjoint account, you will pay any detrimental FICO reaction from his action, of which you cant control.  A joint revolv account is a potential time bomb for which you dont control the fuse.
Ditch it if you can!
New Member
Posts: 6
Registered: ‎05-12-2008

Re: will refinancing a motorcycle from revolving credit to an auto loan improve my score?

[ Edited ]
Thank you, thank you guys for all your help! :smileyvery-happy:  RobertEG, in my credit report the account is listed as a "charge" account with a "credit limit" of $8,000 and type: "revolving.'  I guess I don't really understand what happened either...!  If it were an installment loan, how might it be represented on my credit report??

Message Edited by eringuru on 05-13-2008 02:21 PM

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