What is a Business Credit DUNS Number Used for? 10 Unexpected Uses
There are at least 10 uses for a DUNS number. DUNS stands for “data universal numbering system”.
Does your small business have its free DUNS number from D&B? It’s easy to get—just don’t let them upsell you.
But have you been wondering exactly what the number is used for? Here are 10 uses for a DUNS number. Building business credit is only the start. The major business credit bureaus aren’t the only users of this unique nine digit identifier. About the only thing it’s not used for is tax identification purposes. For that, an EIN is issued by the Internal Revenue Service.
1. System Identification
If you have ever had a job in the data field, then you know the term well. A DUNS number is a ‘primary key’. The idea is to have a unique identifier for everything on a big list. That is because a database is just a big interactive list. Consider your telephone directory.
There may be more than one Mary Smith in your town. How can you tell them apart? Without having to look up which one has an address on Maple Street and which one is on Elm Street, for example.
Using a primary key means a lookup is unnecessary. This makes working with data a lot quicker. It’s one of the internal uses for a DUNS number.
In Dun & Bradstreet’s system, the DUNS number serves as a primary key. But their IT department may even use a different number. It helps D&B tell the difference between Joe’s Pizzeria in Plymouth and Joe’s Pizzeria in Milwaukee. Without a primary key, it would be harder for Dun & Bradstreet to accomplish any database job.
2. Possible Future Business Partners
Deciding if you can be a sound business partner is a major decision and requires extreme vetting. Potential business partners will use a DUNS Number. This is so they can determine a company’s credit history and viability in its report. And, by extension, it can help demonstrate the reliability and honesty of the business’s ownership. This is meaningful data for potential business partners.
If a business does not have a DUNS Number then there is no resume. There’s also no financial report card for the business. This makes it hard to perform due diligence on a company. Entities that need to do so include potential business partners, investors, and customers.
3. Government Contracts or Grants
For a business, having the government as a customer is a tremendous opportunity.
However, you may need a DUNS number in order to bid on contracts or receive grants. This is because many local, state and federal governments require a business to have a DUNS Number. Government agencies do as well. Not having the ability to bid on government contracts means you leave money on the table.
4. Build a Business’s Credit Identity
A DUNS number is a direct link to a company’s business credit report with Dun & Bradstreet. When a company gets a DUNS Number, it can establish its own business credit file. It can then start to build its business credit score.
A company will still have to have payment experiences reporting. But with a solid business credit file, other businesses can assess the creditworthiness and financial stability of a business.
This includes lenders, leasing agents, suppliers, current or potential customers, potential business partners, or other companies.
With no business credit profile, a business cannot help itself. Anybody can pull a business credit report. You don’t have to provide a reason if you want to check a company’s business credit report.
5. SSL Certificate Approval
A DUNS Number can even be a part of the verification of a company’s credentials and existence. This is during the SSL application process. So getting an SSL Certificate approval for the company may be faster and need less documentation. An SSL certificate is vital for a website these days. Yes, a DUNS helps here as well.
6. iOS Developers Account
Apple requires a DUNS Number to create a Company iOS developer account. The DUNS Number is useful for checking the identity and legal entity status of the business. Additionally, this is a part of the enrollment verification process for joining the Apple Developer Program.
You’ll also need a D-U-N-S for the Apple Developer Enterprise Program.
7. Supplier Registration
If a company wants to become a supplier for a major retailer, then a DUNS Number is mandatory. It is a requirement for supplier registration with companies and banks like Bank of America, PNC, and Wal-Mart.
And it’s a requirement for Kroger, Target, and Kohls®. You’ll also need one for Intel®, Aetna®, Porsche®, BMW, and more. Without a D-U-N-S number, suppliers may find they cannot register. And, therefore, cannot profit.
8. Business Customer and Vendor’s Business Credit Reports
Business customers, vendors, and suppliers also use a DUNS number to review a company’s business credit file. This may be to check financial stability, or determine if a company can fulfill a contract. It can also be to decide how much credit to extend to a company.
Or it can help companies determine how dependable any given business is as a supplier. This number is great for a customer to identify the best businesses to work with—now and later.
See it from their perspective. All customers, suppliers, lenders and other business partners want to protect and manage their own risk. They accomplish this by reviewing a company’s D&B report. This helps them decide whether to start or continue to do business with a company.
9. Universally Accepted Business Identification
The DUNS Number is a recognized universal standard for business identification. It identifies, validates and links to hundreds of millions businesses worldwide. It is even recognized and recommended by more than 200 government, trade, and industry organizations.
When a business gets a DUNS Number, it means the company has gone through thorough vetting. The company has by definition passed D&B’s strict validation process. Businesses and the federal government trust this vetting process. It gives them the answers they are needing.
10. Loans from Banks and the SBA
So a DUNS Number is a requirement from lenders and banks on business loan applications. They use the DUNS to get a copy of a company’s credit file.
A DUNS is also a necessity when applying for an SBA loan. Per SBA “If you are already in business, you should be prepared to submit a credit report for your business.”
The Small Business Administration requires all SBA loans be reported to the business CRAs. This is during the entire life of the loan.
Bonus: Building Business Credit
Of course you need a DUNS number to build credit for your business. After all, when you look back at #1, the idea of a system identification should loom very large. Dun & Bradstreet will not add any records about business credit building without a unique ID.
Why is this the case? Because D&B deals with millions of business records every single day. Having a unique identifier keeps them organized. And this is important. So you don’t accidentally get the blame for some other company’s poor use of credit.
But of course, always use credit sensibly! Don’t borrow beyond what you can pay back.
Takeaways for 10 Uses for a DUNS Number
There are more than 10 uses for a DUNS number because it isn’t just a necessity for business credit building. This nine digit identifier is good for more than just business credit reporting purposes. It’s a good idea for all companies.
Any company benefits by as many entities as possible seeing it as being legitimate. LLCs and corporations should view this unique number as being a requirement for doing business.