Q. I can’t get my credit score over 560 to save my neck. I had a stroke and was forced to retire and my finances are a mess. I try to pay a little to everybody. I try to pay on time but I have problems with medical bills and other loans. I also think I have a problem with my credit-to-debt ratio. What should I do? — Stuck at 560

A. Keeping a good credit score in the midst of a major life change – your forced retirement – can be challenging.

It sounds like you’re trying to get your bills and loans paid, but paying late can be a big problem.

First, understand that each individual’s credit score is calculated based on five components: 35 percent payment history, 30 percent amount owed, 15 percent length of credit history, 10 percent credit mix and 10 percent new credit.

If your credit score seems stuck, it may be as a result of late payments that occurred while you were ill and your finances fell to pieces, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

That’s because late payments comprise 35 percent of your score and will remain on your credit report for seven years, she said.

Mott said it’s is important to keep current with the bills you owe the hospital in the event they have been turned over to a collection agency.

“Debt collectors will report late payments to the credit bureaus,” she said. “A doctor, hospital or other healthcare provider won’t typically report a late payment, so if you are still dealing them directly, this likely isn’t the cause of your low score.”

Also remember that you can reach out to your medical providers to try to negotiate for more favorable payback terms.

You mentioned your credit-to-debt ratio. That’s the other major component of a credit score – the amount you owe compared to your available credit.

It’s called your credit utilization ratio, or CUR.

“Your CUR is calculated by comparing the credit limit on revolving credit cards to the outstanding balance,” Mott said. “A CUR under 7 percent is a very good ratio and will favorably impact an individual’s credit score. A ratio between 10 and 20 percent is deemed acceptable, while anything exceeding 30 percent range will negatively affect a credit score.”

If you are paying down the balances on your credit cards, that should be a help to your CUR and positively impact on your score, Mott said.

At this point, time may be the only factor that helps your score improve as late payment data is eliminated from your credit history, she said.

“It’s important to review your credit report each year to be sure the information that is shown is accurate,” she said. “Should you find an inaccuracy like a late payment that is over seven years old, you can ask to have it removed by filing a dispute with the credit company.”

You can get a free copy of your three credit reports from Experian, Equifax and TransUnion at AnnualCreditReport.com.

Email your questions to Ask@NJMoneyHelp.com.

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