A FICO score places a value on types of credit accounts you hold or have held, and your credit history in maintaining those accounts. The FICO score scale ranges from 300 to 850, with majority of people in United States in 600 - 850 range.

Factors Which Affect Your FICO Credit Score

There are 5 factors in all which determine your FICO credit score:

1. Your payment history.

This counts for a very significant 35%--the most of FICO score factors. As you would expect, paying your bills on time is gets you a good score, while paying them late on a consistent basis is will mark down your FICO score. If you have had debts referred to a collection agency, that is worse still, while declaring bankruptcy is worst of all.

2. How much you owe.

Another obvious factor that FICO will take into account in arriving at a credit score. This accounts for another 30% of your total FICO score. It is not just what you owe already that affects your FICO score. Also taken into account is amount of credit available to you. For example, if you have a credit line of $5000, but have so far only used $1000, that will be taken into account.

Your total amount of credit will be totalled, and compared to your annual income. So, loans such as car loans, mortgages, credit cards, store cards, will all be added together. Those who use most or all of their available credit will get a lower rating for this part of FICO score calculation.

This will be rated as most logical sequence of events by most people unless they acknowledge fact that they can save hundreds of pounds by planning automobile loan in a more systematic manner.

Recognizing need for an automobile: The first step will always be to concede that there actually is a need for a car or any other vehicle. The prices of vehicles have heavily come down. But they still continue to be treated as a luxury item. The desire to have a vehicle will always be there. People wrongly try to push desires as a need. Need emerges because of a difficulty being faced by borrower. Only if a need is recognized must one go to second process.

Check for capability: The automobile certainly would not come for free. One must have capability to repay value of vehicle purchased. Fat bank balances are not always required. Taking a secured automobile loan allows investment in more productive uses while making you proud owner of a vehicle.

Secured automobile loans require borrower to keep vehicle purchased or any other asset as collateral. The borrower must have a regular income source. Some lenders however specify a particular limit below which they do not accept borrowers. There is no need to get disheartened if you do not fulfill qualifications. Every lender has a different lending policy. Given numerous lenders offering mortgages, your financial condition is bound to match some or other lender's products.