What is a 'Furnisher'

A furnisher is a company that provides information about a consumer, including credit history, to a credit bureau.

BREAKING DOWN 'Furnisher'

A furnisher can be one of several types of businesses. Furnishers are typically organizations that provide financial services, such as banks and credit card companies, but may also include debt collection agencies and other companies that process financial information.

Furnishers play an important role in helping businesses make decisions about whether or not to grant credit to an individual who has requested it.

Before providing credit, whether that may be in the form of a mortgage, a car loan, a student loan, or a credit card, to an individual, a company will want to understand the potential risk that they are taking on. In order to make an estimate as to the creditworthiness of an individual, financial institutions and other companies want to collect as much historical information about the borrower. They will want to know how much debt the individual has, what their existing line of credit us, and whether they have declared bankruptcy or had a foreclosure in the past.

Furnishers and Legal Regulations

Like lenders, credit reporting bureaus and other entities involved in some way in the process of granting or managing credit, furnishers must abide by clear rules and regulations. In the U.DS., these regulations for furnishers are enacted and enforced by the federal government.

All of the information that a company can collect about an individual is compiled and analyzed in order to establish a consumer report. One of the most commonly-recognized consumer reports is a credit rating, which is a score used to indicate whether a consumer presents a credit risk.

In the United States, the Federal Trade Commission (FTC) regulates the activities of companies that provide consumer information. Furnisher regulations include the methods used to collect consumer information, the sources of the information, and the accuracy of the information. Furnishers must ensure that any information passed to a reporting bureau can be backed up by records, and the information is provided in a clear manner so as to reduce the possibility of wrong conclusions being made. Furnishers are required to have written policies and procedures relating to how it ensures the accuracy of the information that it collects.

A consumer may directly dispute the information provided by a furnisher if they believe that the information contained in a consumer report or relating to an account is inaccurate. This can be important, since this inaccurate information can have negative consequences on the individual’s ability to get credit.

RELATED TERMS
  1. Credit Bureau

    A credit bureau is an agency that collects and researches individual ...
  2. Credit Reporting Agency

    A credit reporting agency is a business that maintains historical ...
  3. Credit Mix

    The different categories of debt within a consumer's credit history ...
  4. Credit History

    Credit history refers to the ongoing documentation of an individual's ...
  5. Credit Rating

    A credit rating is an assessment of the creditworthiness of a ...
  6. Fair Credit Reporting Act (FCRA)

    The Fair Credit Reporting Act (FCRA) is the act that regulates ...
Related Articles
  1. Personal Finance

    How to Read Your Consumer Credit Report

    Learning how to read your consumer credit report is vital, as it includes important information about your credit history.
  2. Personal Finance

    Why The Credit Score You Buy Differs From The Lender Score

    It takes many people by surprise when they purchase credit scores and find the lender's credit score disclosure does not match.
  3. Personal Finance

    Which Is More Important: Credit Report or Credit Score?

    Here's the difference between a credit report and credit score, and which is more important.
  4. Personal Finance

    4 Personal Financial Tips for Young Professionals

    Young professionals should consider these four tips to establish a solid financial foundation.
  5. Investing

    Investing In Credit Card Companies

    This investment requires keeping an eye on consumer indexes and the overall health of the economy.
  6. Personal Finance

    How Your Credit Score Compares to the Average American's

    While only a small percentage of Americans have terrible credit scores, a whopping 30% have poor or bad credit, according to the Consumer Financial Protection Bureau.
  7. Managing Wealth

    Business Vs. Consumer Credit Reports: What's the Difference?

    Find out the difference between a business credit report and a personal credit report, and why it should matter for business owners.
  8. Personal Finance

    Is Your Credit Score at 850? It Can Be!

    Use these tips to increase your credit score and your ability to get low interest rates on loans.
  9. Personal Finance

    Get To Know Your Consumer Financial Protection Bureau

    The CFPB is there to protect you and hear your voice. You can help with the economic recovery by getting to know the bureau.
  10. Personal Finance

    Do You Understand Your Credit Score?

    Most Americans don't really understand their credit scores. Find out what you need to know.
RELATED FAQS
  1. What's the difference between a credit rating agency and a credit bureau?

    Learn how to differentiate between credit rating agencies and credit bureaus, two industries that distribute valuable risk ... Read Answer >>
  2. How do credit bureaus make money?

    Take a closer look at how credit bureaus make money, and learn about the kind of services they provide to both lenders and ... Read Answer >>
Trading Center