We then describe several furnishing strategies that emerge in the data.
7
We first show that only a
small fraction of potential furnishers provide information on any commercial loans to consumer
credit bureaus. Comparing the number of bank furnishers with the known number of banks with
commercial credit on their balance sheet, we find at least 89 percent of banks are not furnishing
information on commercial loans to consumer credit bureaus. Second, we show that furnishers
likely are not reporting all types of commercial credit to consumer bureaus. Only 15 percent of
entities who furnish information on commercial loans to consumer bureaus also report
commercial lines of credit despite existing survey evidence that lenders typically offer both loans
and lines. Lastly, we show that some entities only furnish information on commercial credit
accounts that are seriously delinquent (i.e., 90 days or more delinquent or in a similarly negative
condition). This strategy is most common for entities that report business credit cards or
commercial lines of credit.
Furnishing commercial credit to consumer credit reports has important implications for
business-owning consumers and consumers that provide guarantees for commercial loans. The
presence of a commercial product on a consumer’s credit report means that the payment history
of the consumer’s business can affect the availability and cost of consumer credit, such as
residential mortgages, consumer auto loans, and consumer credit cards.
8
The variety of
furnishing strategies that we document also has different implications for a consumer’s credit
and the availability of future commercial credit. When applying for a commercial loan or line of
credit, a business owner may not be fully informed as to whether, and if so, how and when, that
product will appear on their credit report, which, as we document, could depend on the lender
and the product sought. Furnishers who only report commercial loans that are seriously
delinquent prevent a business owner’s personal credit from benefitting from a positive payment
history but do allow for the consumer’s personal credit to be harmed by any negative payment
history. On the other hand, consumers may benefit from a product not being furnished if, for
example, they have a high utilization rate on their business credit lines.
companies may have changed their standard furnishing practices; such changes are outside the scope of this report.
The Small Business Credit Survey shows various financing and performance-related challenges that small business
owners faced during the pandemic. As an example, many firms experienced sharp declines in their financial
conditions, resulting in many small business owners using their personal funds instead. In addition to that, approval
rates for many loans and lines of credit declined after the onset of the pandemic. Using the CCP data to study the
effect of the pandemic on commercial credit products is a vein of future Bureau research that we discuss further in
the conclusion.
7
For more information on payment furnishing see Consumer Financial Protection Bureau, “Quarterly Consumer
Credit Trends: Payment Amount Furnishing & Consumer Reporting” (November 2020), available at
https://www.consumerfinance.gov/data-research/research-reports/quarterly-consumer-credit-trends-payment-
amount-furnishing-consumer-reporting/.
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A consumer credit report is not the only channel by which small business credit can affect the availability of
consumer credit. For example, small business owners may need to include payments on small business loans in
their calculation of debt-to-income when applying for several consumer credit products.
QUARTERLY CONSUMER CREDIT TRENDS: COMMERCIAL CREDIT ON CONSUMER CREDIT REPORTS 4