Your credit rating is a measure of your credit-worthiness or in other words, your record of borrowing and repayment. Without a credit rating, few institutions will lend you money.

Governed by provincial laws, the credit bureau - the clearing-house of information on consumers' use of credit - provides a credit history, which is a list of facts about how you handle debt. This information is gathered from financial institutions, retailers and other lenders. Most of your credit information remains on your file for seven years. In addition to negative information, positive information is also reported on your file. Make sure that the information each of the two credit reporting bureaus has on you is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies.

Here is how to build a good credit rating:

• Pay your bills promptly, especially credit cards.
• Borrow only what you need and what you can afford. Dont "max out" your credit lines. Since the size of the balance on your open accounts is a factor, lower balances are better.
• Try to pay off loans on time and as quickly as possible.

Not only does it help your credit rating, you also save valuable interest costs. It's said that by carefully managing your credit, it's possible to add as much as 50 points per year to your score.

As a consumer, it's your right to know your credit rating. Credit can be denied based on inaccurate or insufficient information. You may want to check your file if you aren't sure of your credit rating, if you are refused credit or if you plan to apply for a large amount of credit such as a mortgage. You can get a copy of your credit report through one of the many credit bureaus across Canada for free or for a nominal charge.

Here are some guidelines:

• Contact your local credit bureau, which you can find in the yellow pages.
• Call to find out how you can review your file. You'll be asked to provide identification to ensure the confidentiality of your file. A written report may take two to three weeks.
• If you notice any errors and can offer written proof, your file will be changed immediately. If you can't supply written proof, give the facts to the credit bureau, which will then investigate. If your facts are confirmed, your file will be updated.
• If you see an error but proof cannot be found, what happens next depends on where you live. Each province has its own legislation relating to credit bureaus. The information you are challenging may be taken off your file or a note may be added, saying the information is "in dispute".
• If an error has been corrected, the credit bureau must notify members who have inquired about you during previous months (as required by provincial law).

Chances are you have a credit problem if you:

• Can't make your minimum monthly payments on your credit cards,
• take cash advances for living expenses,
• aren't sure how much you owe and
• never seem to be out of debt.

Here are some tips to help you recover:

• Put away all of your credit cards.
• If you have several debts, consider consolidating them into one consumer loan. You'll save on the interest rate alone, especially if your debt is from credit cards.
• If slow payments are affecting your credit rating, consider contacting your creditors to see if you can make alternative arrangements. Be honest with your creditors. Let them know you're in difficulty and work with them to find the best way to meet your financial obligations.
• Try and figure out how you got into debt and stick to a plan to prevent it from happening again.
• Re-evaluate your spending habits and lifestyle.
• Seek the advice of a credit counselor if you can't sort things out yourself. There are several not-for-profit credit counseling agencies across Canada . An experienced counselor will sit down with you to look at your situation, discuss your options and help you develop a course of action.
• When you begin to recover financially, consider keeping only one credit card. It will be easier to track your spending and you won't have the collective credit limit to tempt you.