As a small business owner, it is essential to understand your financial standing, such as the lines of credit you’ve opened, your payment history and your credit score. Your credit report documents your credit history and is a foundational document when being considered for a small business loan.
A data furnisher is a bank or non-bank lender that has provided you or your business with funding and shares that information with credit reporting bureaus to include in your credit report.
Why Do Lenders Furnish Data?
Data furnishing is important because it allows credit bureaus to provide the most accurate information about an individual or small business owner’s debts and payment history. Furnishers provide account information, like where you’ve applied for credit, any outstanding balances, and your payment history. Credit bureaus compile all this information into your FICO score.
As part of responsible lending practices, many financial institutions participate in data furnishing, though it is not legally required. Furnishing promotes responsible financial decisions, opening future opportunities for additional lines of credit, and better rates and terms for borrowers in good standing.
Regulations on Data Furnishing
Data furnishers must follow Fair Credit Reporting Act’s (FCRA) Furnisher Rule. A data furnisher must:
- Provide information that is accurate and complete
- Give borrowers a thorough investigation if they decide to dispute findings
All credit activities stay on your report anywhere from 2-10 years, or even indefinitely. It is important to read your credit report every year and report any fraudulent activity directly to the credit bureau.
There may be discrepancies in credit reports or credit scores depending on where the data is pulled from, so it’s important to check your credit report every year to maintain control of your financial present and future.