Example: Mary, James and the different effects of payday loans on their credit score
Mary and James are a couple considering applying jointly for a car finance deal. They check their credit files to see how likely they are to be approved for a big loan.
Mary took out a payday loan 5 years ago but made every repayment on time. This had a positive impact on her overall credit score.
James took out a payday loan 2 months ago and missed his first repayment. This had a disastrous impact on his credit score.
The couple decided that Mary would be better off applying on her own, with James transferring the cash to her.
* This is a fictional, but realistic, example.