What’s the most powerful tool you can employ in your home improvement project? It’s not a great contractor, creative architect or even a lot of do-it-yourself know-how.

“Your good credit score is a powerful tool for achieving your home improvement objectives,” says Maxine Sweet, vice president of public education for Experian. “Your credit score can impact the financing you need to pay for your home improvement project.”

If you’re considering a home improvement project this year, the first step to accomplishing it should be to make sure your finances are in order. A recent Experian-Gallup survey indicates that most people know their credit rating is important, and 19% actually say their happiness depends on it. A third of those surveyed said they intend to take steps this year to improve their rating.

Next, set the budget and scope of your project. What exactly do you want to achieve and how much are you willing and able to spend for it? Are you refurbishing your kitchen to improve resale value? Or adding a room for your growing family? Know what it will cost to reach your goal and take steps to ensure you can stay within your budget.

Once you know how much money you’ll need, you can explore your financing options. Some popular financing tools include home equity lines of credit (HELOC) and bank loans. A HELOC allows you to borrow against the equity you already have in your home but with the flexibility of a credit card; you can draw the money as you need it up to your approved amount. A traditional second mortgage can provide you with all the funds in a lump sum up front. In many cases, the interest on both may be tax deductible. Do your research and consult several mortgage professionals before deciding which product is right for you.

Before you apply for any financing, be sure to check your credit report and score. If you have some blemishes on your credit report, try following these steps to better stay on top of your credit situation:

Pay your bills on time. Delinquent payments could potentially have a strong negative impact on your score. Keep balances low on credit cards and other revolving credit. High outstanding debt could lower your score. Apply for and open new credit accounts only as needed and pay off debt rather than moving it around.
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Courtesy ARAcontent.