Money Management

Paying bills late is problematic no matter what. But the damage might be worse for people with strong credit. Read on to learn more. 

We’re all human. And because of this, there may come a time when you’re a little late making a loan payment or paying a credit card bill.

Rest assured that if you’re a couple of days late with a loan or credit card payment, it shouldn’t have an impact on your credit score. Even if you’re a couple of weeks late paying that bill, your credit score shouldn’t take a dive.

Rather, it’s when you’re 30 days late or more with a payment that the potential for credit score damage exists. And the extent of that damage will largely depend on how high or low your credit score was to begin with.

A single late payment could drag a higher credit score down

You might think that if you have strong credit to begin with, a single late payment won’t do much harm. After all, if your score is, say, in the mid-700s or higher, it generally means you do a great job of paying your bills on time. So a single late payment shouldn’t have much of an impact, right?

Wrong. Believe it or not, the higher your credit score is, the more of a hit it might take when you’re late with a loan or credit card payment.

FICO says that someone with a credit score of 793 might see that number drop to 710 due to a single 30-day late payment. For a 90-day late payment, a credit score of 793 might plunge to 660. So we’re talking about an 83-point drop in the first scenario and a whopping 133-point drop in the second.

Meanwhile, someone with a credit score of 669 who’s 30 days late on a payment might only see their score fall to 625 — a 44-point drop. For a 90-day late payment, a score of 669 might drop to 590, which is only a 79-point hit.

This might seem gloriously unfair to you. But the reason a single late payment does more damage to a higher credit score is that such a thing is generally considered to be out of character. Because of that, the damage is more severe.

By contrast, someone with a credit score of 669 compared to 793 has probably made a late payment or two already — hence the lower score. So at that point, credit bureaus tend to adopt a “what else is new?” mentality and penalize borrowers in that situation to a lesser degree.

Again, nobody said this method is fair. But it’s important to know how the system works.

What to do when you’re at risk of having a late payment reported

Lenders and credit card companies will generally report late payments once they’ve reached the 30-day mark. If you’re nearing that point and know you can’t make your payment on time, but it’s your first offense along these lines, reach out and ask for some leeway. If you’re able to make your payment within 14 days, for example, your lender or credit card issuer might throw you a bone and agree not to report that delinquency.

Similarly, if you’re experiencing a hardship that’s likely to make it so you can’t keep up with your loan or credit card payments, have a conversation about it. Your lender, for example, might allow you to pause your loan payments temporarily if you can show proof of financial hardship, like the loss of your job or an injury that’s keeping you out of work.

A single late payment has the potential to cause a lot of credit score damage, especially if you have great credit to begin with. So it’s really best to avoid being late with your payments, period. But if that’s not possible, at least reach out and see if there’s a way to mitigate the damage.

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Research shows that the number of people leaving inheritances has increased in recent years. Here’s what to expect if your inheritance includes a home. 

Inheriting a home is far less daunting if you go into the experience with a plan in place. Here, we’ll cover some of the most important factors to consider.

Financial and legal responsibilities

Right away, you’ll be responsible for paying expenses. Whether you’re the sole beneficiary or inherit the home along with others, bills have to be paid. That means not allowing anything to fall through the cracks. Here’s a sample of bills that will need to be paid.

Mortgage

If there’s still a mortgage on the property, it is not forgiven when the owner dies. Plan now to make those monthly payments until you determine whether you’re going to keep the house.

Insurance

You’ll need to have the homeowners insurance policy rewritten in your name. You can either stay with the same insurance company the previous owner used or shop around for another policy. Some insurance companies allow beneficiaries around 30 days to put a new policy in place.

There is an exception to this rule: If the home goes into probate, you can’t assume ownership until the probate process is complete. And if you don’t have ownership, you can’t have it insured in your name.

Still, it’s up to you to make sure the house is fully covered against loss. Either you, or the executor of the estate (if that’s someone else) should contact the current insurance company to ensure the home is covered. If coverage is about to lapse, ask about a short-term policy.

If the house has a mortgage, the mortgage lender will require you to maintain coverage. If there’s no mortgage, you may be tempted to live without coverage until the house is in your name. Don’t do it. All it takes is one lightning strike to burn your inheritance to the ground.

Taxes

If the deceased still made mortgage payments, property taxes are typically paid out of an escrow account (funded through mortgage payments). If there is no mortgage, you’ll need to cover the semi-annual or annual property tax payment.

Outstanding debts

Outstanding bills must be paid. Everything, from utilities to credit card payments are still due, even if someone dies. The only exception to that rule is if the deceased left no money and nothing of value behind. That’s not the case if you’re inheriting a home.

Make a plan

As mentioned, creating a plan now is far easier than deciding what to do next when your emotions are raw. Let’s take a look at the steps you can take to customize a plan that fits your situation. For illustration purposes, we’ll assume that people naming you as a beneficiary are your parents. These steps could apply to anyone, though.

Have a frank discussion with your loved one(s). Let’s say you expect your parents to leave you their home when they die. First, let them know you have some questions and ask if they would be comfortable discussing the situation with you. Find out if you’ll be the sole beneficiary of their estate or if they plan to leave it to a group of people. If you have siblings, chances are they’ll divide it up.Find out who the executor will be. The executor is the person who is trusted to carry out the terms of the will. They are legally bound to do things precisely as laid out in the will.If the plan is to leave the home to you and your siblings (or you and anyone else), have a conversation with those people. Let them know how important they are to you, and suggest working together now to plan for the day the home is passed down to you.If you, or one of the others, has a joint bank account with the deceased, that means someone will have access to funds at the time of death. Make sure the joint account holder understands that they will need to use some of that money to cover ongoing expenses, like mortgage, insurance, and utilities. No one benefits if bills go unpaid.If there are no joint accounts, find out if your parent’s bank account is designated as “payable-on-death.” Typically, an account holder can assign beneficiaries to their bank accounts to be paid out once the account holder dies. If that’s the case, those funds can be used to cover ongoing expenses.

The tricky bit

If you expect to inherit a home with others, agreeing on what should be done with the house once it’s legally your shared property can be like ice skating on a telephone wire. One person may dream of selling it and using their portion of the proceeds to start a business, while another wants to move in and raise their kids in the house.

Go over your options together. The goal is to come up with an agreement you can all live with. Here are some of the most common options:

Move in. Moving in can be a good choice if you can afford the home. However, if you’re splitting the inheritance with others, moving in may not be possible for any of you. It’s important to note (and share with the others) that you may not be able to simply add a name to the mortgage and take over the payments. It’s quite possible that you’ll be required to pay off the existing mortgage and refinance the house in the name of the party who will live there.Rent it out. Consider using the property as an investment vehicle. Before going this route, though, you may need to spend money to make upgrades to the house. You should also learn everything you can about what it takes to be a landlord and decide if that’s the right choice for you. Again, this option is more complicated when you are a co-beneficiary. Not only are there tax implications to consider, but you’ll also need to decide on things like who will pay for repairs, who tenants will call when a water pipe breaks, and how rental income will be divided.Sell the home. It’s not always in your best interest to keep an inherited property. If you’re looking for a clean break, selling is the easiest way to make that happen. If you do decide to put it on the market, plan to cover all ongoing expenses until it’s sold.

Reminder: Before making any decisions, speak with a tax professional to learn how each option will impact your bank account.

Losing someone you care about is tough, and it’s only made worse by floundering when what you really want is to make confident decisions. If you begin the planning process now, you’re less likely to have regrets later.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Made of cedar, the Yardistry Greenhouse at Costco is a big investment. Is it worthwhile for you? Read on to learn more. 

Pursuing hobbies is a great way to stay busy and do something meaningful with your time. So if you’re an avid plant-grower, you may be considering making an investment in a greenhouse of your own.

Costco is selling this Yardistry Greenhouse for $1,499.99 online, and that price includes shipping and handling. That’s not a small outlay of money. So you’ll need to do some research to make sure the Yardistry Greenhouse at Costco is a good buy for you.

About the Yardistry Greenhouse

The Yardistry Greenhouse at Costco is made of cedar, and from an aesthetic standpoint, that’s a plus. The greenhouse also features double-wall polycarbonate windows, which are durable and provide solid insulation.

Additionally, the greenhouse features a heat-sensitive roof and is designed to maintain temperature and humidity for optimal growing conditions. The greenhouse’s measurements are 7.8 feet in length x 6.7 feet in width x 7.7 feet in height.

Yardistry will also include a one-year warranty on its greenhouse. And since Costco has a very generous return policy, you can take your purchase back if you’re not happy with it.

However, you should know that the Yardistry Greenhouse has solid reviews. With 4.5 out of 5 stars, it’s clear that customers are generally satisfied with this particular product.

Now, do note that you will have to assemble this greenhouse yourself. However, based on reviews, this seems like it should be a fairly simple task. And customers who have purchased this product through Costco seem to think it’s well-made.

Is the Yardistry Greenhouse a solid buy for you?

Any time you’re looking at a larger purchase, it’s important to do your research. That means comparing the Yardistry Greenhouse to other models in terms of both cost and features.

But first, a few more things about this model. The $1,499.99 online price point may not be your most competitive. Rather, you might find this item priced lower at your local warehouse club store.

Either way, if you have an executive membership at Costco, you’ll be eligible for 2% cash back on this model (and any other purchase, for that matter). Plus, the credit card you use might give you additional cash back to offset your total cost.

Before you buy this or any other greenhouse, make sure you don’t need a permit from your city or town. And if you do, you may want to procure that permit before shelling out money for the greenhouse kit.

Also, if you live in an area overseen by a homeowners association, you’ll want to make sure that having your own greenhouse isn’t against the rules. Violating HOA rules could result in costly fines. And you don’t want to go through the hassle of ordering and assembling your own greenhouse, only to have to return it.

As far as price goes, Home Depot seems to be selling the same model for $2,199.99. Sam’s Club offers an array of greenhouses at lower price points, but not this model or a seemingly comparable one. So if you specifically want the look of cedar, you may want to go with Costco’s offering.

Of course, you’ll also want to make sure you can afford to purchase a greenhouse in the first place. If you have existing debt and keep finding that money is tight, then you may not want to make such a large purchase. Rather, a better bet may be to work on saving up money over time, or waiting until you’re in a more favorable position financially.

But if you’re doing well enough financially and are eager to take your plant-growing hobby to the next level, then this is an investment that may be quite worthwhile for you.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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