If you've got a few things around the house that you'd like to spruce up but don't have the money for, you might want to consider getting a home improvement loan.

As the name implies, a home improvement loan is designed to pay for improvements to a house or other form of real estate. The house and the improvements themselves serve as collateral for the loan, thus reducing the need for additional collateral to be on the line.

Best of all, a home improvement loan can help you to improve both your credit score and the value of your house all at the same time.

Collateral you can live in

Much like a mortgage or other home loan, a home improvement loan uses the equity in your house or real estate (with the equity being the amount of the home that's already paid for) as a basis for the collateral value of the home.

This value is used, along with estimates for the improvements that you want to do, to determine how much the amount of the home improvement loan is going to be. The more equity the house or real estate has in it, the larger the loan amount can be