credit file ruined

peagee75

Hi,

My credit file is currently terrible with defaults and a ccj, these will drop off in the next 3 -5 years, my question is do i use the time to save for a mortgage or should I start paying into a pension, which my employer has to offer from May, I'm 41. Thanks

[Deleted User]

Not enough information to say.

Either one, the other or both, depending on savings, retirement plans and your personal circumstances.

National_Debtline

Hi there and welcome to MSE,


I am afraid more information is really needed to guide you. You can look at some of the mortgage threads and the main site for more information about what you would need with regard to a deposit and how much it would cost you. And you may want to take some advice from the Pension Advisory Service about investing in your pension (0300 123 1047).


However, the key issue is - is all of your debt clear now? If it is then obviously you can reinvest your surplus in something else. If not then the debts must be dealt with first. The older information is on your credit file the better, so as the defaults and CCJs get older they should have less impact on your overall credit worthiness. Good luck,


Laura
@natdebtline

MallyGirl

whilst you do need to address the debt problem, it would be worth checking what the company pension terms are. If they will match your contribution, or give any at all really as long as you do then it would be in your long term interest to take advantage of that.

peagee75

I am paying the debts back through a dmp, so I am managing my budget ok at the min, my employer is using smartpension which I think until 2018 contributes 1% to every 0.8% I put in, just confused as to what the best future plan is really. Thanks for your help though

Ian011

National_Debtline wrote: »

... Pension Advisory Service ... (0845 601 2923)...

The Pension Advisory Service no longer uses a premium rate 0845 number.

See official website for the new 03 number.

phillw

peagee75 wrote: »

My credit file is currently terrible with defaults and a ccj, these will drop off in the next 3 -5 years, my question is do i use the time to save for a mortgage or should I start paying into a pension, which my employer has to offer from May, I'm 41. Thanks

It depends on your income and outgoings. If you're paying back money and the interest rate that you are being charged is higher than you'll make back on the pension then don't pay into a pension. Working out the return on a pension is hard as some perform really badly and others do quite well, some can even pay out less than you put in. Don't rely on the employer to pick a good one, they will pick one that gives them short term advantages and not one that will give you good long term advantages.

It's only a very narrow window where you could afford a deposit, but not the pension contributions.

National_Debtline

Hi again,


Thank you Ian011, you are right, that is the old number I gave (apologises for any confusion, I have edited original number for clarity). Pension Advisory Service - 0300 123 1047.

peagee75 wrote: »

I am paying the debts back through a dmp, so I am managing my budget ok at the min, my employer is using smartpension which I think until 2018 contributes 1% to every 0.8% I put in, just confused as to what the best future plan is really. Thanks for your help though

There are several things to consider here, how much do you owe and how much are you paying into your DMP? Is it with one of the free charities or are you paying a fee? This will help you to calculate when the debts will clear and whether you will be able to rebuild your credit file enough to qualify for a mortgage and save for a deposit in the future.


If you post a SOA that would help us guide you further.


Laura
@natdebtline