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You put your own reputation on the line when you write a letter of recommendation. If you feel you do not know the person well enough, or they are somebody you cannot in good conscience recommend, decline their request.
How important are letters of recommendation? Letters of recommendation are required for almost every graduate school application and are a very important part of the application process. Usually grades and test scores factor in most heavily; however, your letters of recommendation could be the deciding factor in the admission process.