Do you know where your credit rating stands? No? Well you should because it is the single most important factor that proves your worthiness in society, and if it's bad or in error, you can suffer very serious consequences.

You see, banks determine whether you can get a mortgage, a car loan or a credit card, based on your credit rating. Even employers have begun screening employees' credit ratings as part of the hiring process, so you'd better make sure that your credit information is accurate.

i've got my eye on you

So who keeps track of your financial baggage, and just how accurate is the information they have on you? Large credit bureaus keep track of every loan you've applied for, every loan payment you've made, and every loan you've defaulted on.

The credit report even keeps track of any outstanding debt, lists of credit card accounts, including credit limits and payment history (late payments) for each account, your current loans, and any bankruptcies or civil judgments against you. The credit report should also state the name of any company who has requested a copy of your report.

Yet much of what these giant credit bureaus say about you might be wrong. For example, a couple of years ago, a good friend of mine, Daniel Spencer, applied for a mortgage loan. Unfortunately, his banker refused the loan under the premise that Daniel had the worst possible rating.

This completely shocked Daniel because as far as he was concerned, he had a solid record. He always paid his credit card balances on time, and had no current outstanding debt. Upon further investigation, Daniel discovered that besides an old address and having misspelled his name, he had a personal bankruptcy declaration attached to his name as well. What went wrong?

a quick fix

The problem, as he later discovered, was that he had an unpaid telephone invoice for $35, which the telephone company forwarded to his old address. As for the personal bankruptcy note, that still remains a mystery.

You'd think that all he had to do was call up the credit agency and straighten out the problem, right? Well instead of helping him out, the agency asked Daniel to prove that he was right. By the time everything was settled, three months had passed and the home that Daniel was trying to buy was purchase to someone else.

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