Personal loans can help you get out of a financial bind, and they can empower you to upgrade your lifestyle and have access to big ticket purchases that you could not otherwise afford. However, not everyone is able to get an unsecured personal loan. If you anticipate that you will need a personal loan in six months to a year or longer down the road, the time to act is now. Here are three things that you can do to prepare to qualify for a personal loan when you have bad credit.

Get Your Required Documentation in Order

Different banks and financial institutions will have different requirements for personal loans. For the most part, you need to have documentation in place before your loan application can be processed. Make sure you have proper identification, which will be a government-issued ID in the form of a passport, a driver's license, or a state identification card. You will also need the following documents:

• Verification of your current residence, which can be a utility bill or a copy of your lease.
• Proof of your current and past income, which may be from tax documents or pay stubs.
• Social security card and/or birth certificate.

You may also be asked to supply information like your gross income, your net income, your social security number, your phone number, your email address, your employer's full information, your monthly financial obligations, and your date of birth.

Improve Your Credit History

When you have bad credit, it can seem impossible to fathom having good credit again. However, with just a few simple steps, you can be on your way to improving your credit in a big way. Try the following steps.

• Contact any past debtors and make payment arrangements. By paying just $10 per month, you may be able to clear an old debt from your credit report and turn it into one that helps build your credit.
• Take out a secure credit card. A secured credit card is similar to having a savings account with a debit card attached, except it counts as a real credit card. You are only given a credit amount that is equal with your deposit into the secured credit card account. This may change over time when you gain the bank's trust.
• Apply for a gas credit card. Sometimes gas credit cards are the easiest type of credit card to get, and they can help you re-build your credit.

Finally, keep in mind that personal loans may be the best choice for your overall financial health. Take the steps now to ensure that you can get a personal loan when you need it. Preparation is key to being completely in control of your financial well-being now and in the future.