Buying a motorcycle could hurt your credit

With gas prices continuing to linger above $3.70 in many cities throughout the country, a number of consumers have been opting for smaller, more fuel-efficient vehicles. Rather than drive around an old, gas-guzzling SUV, some may be thinking about purchasing a motorcycle.

However, making this purchase could have a negative effect on a person's credit score, WalletPop reports.

The news source says that individuals who secure a loan for a motorcycle may unknowingly have this debt reported as revolving credit, which is the type most often associated with credit cards. Although some motorcycle loans are in fact constructed as installment loans not unlike car loans or mortgages, most aren't. As a result, a person's credit utilization ratio – the amount of revolving debt carried divided by his or her total limit – could skyrocket. A higher ratio can hurt a person's score because lenders may view that individual as being overly reliant on credit, and thus, a riskier borrower.

Another factor that can negatively affect consumers' credit scores is a problematic or questionable item on their credit reports. Individuals who find a blemish – whether it's an inaccuracy or a mark that cannot be properly verified – may benefit from working with a credit repair company to investigate and dispute it.