We know more than ever about how credit scores are calculated. Learn how to clean up your record, polish it to a new gleam and reap the financial rewards.

Liz Pulliam Weston

So you've had a few problems getting the bills paid lately, and you're wondering what you can do to repair the damage.

You've got plenty of company. There are more than 30 million people in the United States with credit blemishes severe enough (score under 620) to make obtaining loans and credit cards with reasonable terms difficult.

Or maybe your credit is OK, but you'd like to make it better. After all, the better your credit, the lower the interest rates you can score on mortgages, car loans and credit cards.

New glimpses into the once-secret process of credit scoring have made it easier than ever to improve your credit -- and reversed some of the advice we personal finance journalists once gave consumers about managing plastic.

(For the uninitiated, credit scores are three-digit numbers increasingly used by lenders when evaluating your creditworthiness. Insurers, employers and landlords also use the scores in evaluating the applications they get. Scores range from 300 to 850. Only about 11% of the surveyed population ranks above 800; 29% ranks between 750 and 799.)

Anyone who wants to improve a credit score should first do some basic housekeeping: Get a free copy of your credit report from one of the three major credit bureaus (click here), scour it for any mistakes and ask the bureau to remove incorrect information. Once that's accomplished, you can start to work on burnishing your score.

Here, then, are the five steps to credit repair:

Pay your bills on time

Payment history is the single most important factor in determining your credit score, making up 35% of the total. Since recent history carries more weight than what happened five years ago, getting in the habit of making on-time payments is an incredibly powerful way to start rebuilding your credit rating.

Likewise, delinquent payments can devastate your score. Missing even one payment can knock 50 to 100 points off a good score. Skipping payments for a single month on all your bills can lower your number from a respectable 707 to the dismal range of 562 to 632, according to the credit score estimator at Bankrate.com. The simulator lets you estimate your credit score and see the impact of various credit behaviors on your score.

Tip: I've found the best way to avoid late payments is to put as many of our bills on automatic as possible. Our mortgage lender, utilities and phone service providers are happy to take their payments directly from our checking account each month. Online bill-payment systems are another way to ease monthly check-writing chore, and many provide reminder services so you don't forget a bill. The latest versions of Quicken and Money have good reminder features, as well.

Pay down your debts -- and consider charging less

Lenders like to see plenty of breathing room between the amount of debt reported on your credit cards and your total credit limits.

The more debt you pay off, the wider that gap and the better your credit score.