Where should I invest

Innocenti

I have about £15000 to invest. It was a deposit for a mortgage but we got turned down due to adverse credit. It is mostly defaults and lots of late payments.

The plan now is to put the money away for 12 - 18 months and clean up our credit rating, we are going to pay off most of our smaller debts and leave about £4000 in debts but plan to pay on time every month. I know that your credit rating lasts for 6 years but hopefully 12 - 18 months of no more adverse credit will help.

Where would be best to invest? ISA's or banks/building societys. I dont really understand ISA's. Which one would give us the best return.

Of course i just hope that in that 12 - 18 months we dont get priced out of the market - again!

Aegis

If you can pay off all of your short term debts, that might work out better than trying to save and gradually clear them, unless you can shuffle around the debt onto 0% schemes.

An ISA is a wrapper that makes the enclosed account (whether cash or stocks and shares) exempt from any further income tax or capital gains tax. For cash accounts, this makes them entirely tax free, for stocks and shares accounts it makes them tax free beyond the 10% tax withheld at source on dividends.

Innocenti

Hi Aegis

Thanks for your reply. We cant spend all the money on repaying the debts as it would leave about £10000 which is not enough of a deposit. A vicious circle really.

dunstonh

Clear the debts. It doesnt matter that it reduces your deposit. It will be cheaper on the monthly payments and you will find it easier to put more aside each month.