Some time ago I have decided to pursue the notorious American Dream and purchase myself the white picket house I have always dreamt about. I sort of knew that my credit was not in the best shape possible, mostly because I’ve maxed out my share of credit cards. However I have tricked myself into believing that it couldn’t be that bad.

One day I went to a mortgage company to check if I can finance my dream house. I filled out an application, and when they pulled my credit report it was lower than what I was expecting. I have started my journey three months ago with a 620 credit score, five credit cards, a credit utilization of 58%, 3 missed payments on a closed account 3 years ago and 1 hard inquiries. My goal was to break the 720 credit score and I have managed to do it in just three months!

I have put together a list with all the actions I’ve taken to improve it so I can provide you an in-depth plan.

I have thoroughly researched how the scoring works, so I did everything I could to raise my credit score. How much you owe makes up 30 percent of your credit score, so this is a crucial element. The most important factor in boosting my credit score over the last 90 days was lessening my credit utilization. I have decreased my utilization by 38%! I have also paid more than the minimum due on each credit line.  I have started with the most costly credit, the one with the highest interest rate in order to ensure that the total amount of interest paid is as low as possible.

Another strategy I have applied was raising my credit limit on one of the accounts, by accepting the pending line increase offer I had ignored for months. My utilization has now lowered to just 20%, which is under the suggested utilization ratio of 30%.

By increasing the credit line you can improve your credit utilization ratio, which is calculated as a percentage of the amount you have used and the total credit limit. Most credit card issuers will give you the possibility to request a credit line increase without a credit inquiry. If this is the case you should accept it, however this does not mean that you should use the extra credit.

I have also found out that the payment history makes up about 35% of the credit score. As the recent activity is given more weight than older transactions I have put together a bill calendar. This way I have a better idea which bills are due. I have set up an auto schedule payment on all accounts that allow this feature as for the remaining I try to pay them 2-3 days in advance to limit any room for errors.

You should try to improve your credit score as much as possible as the higher it is, the better your chances of being approved and the better the terms of your mortgage (interest rates, and down payments).The mortgage rate difference offered to a customer with the highest credit score and to one with the lowest acceptable credit score can be as much as 1.5%.

Because of the techniques I used I have managed to raise my credit score with 102 points in as little as three months; so I can now afford the dream house I have always wanted.