Published By Janet Gershen-Siegel at February 25th, 2018
Does your business have a DUNS number? If it doesn’t, you are missing out. A DUNS number is exceptionally helpful. There are any number of things a DUNS number helps you do. But what is a DUNS number, anyway?
A DUNS number is Dun & Bradstreet’s unique identifier for your company. If your company is Joe’s Pizzeria, there may be one in Oshkosh and another in Hicksville and creditors won’t be able to tell them apart.
Enter the DUNS number. With this unique ID, creditors can punch your information into a search for company information. If a creditor doesn’t know your DUNS number, they can find it on the D&B website. D&B keeps a large database – large, as in hundreds of millions of companies. Databases need unique identifiers (called a ‘primary key’ in the lingo). The DUNS number is the primary key which D&B uses to find your company amidst millions of other companies.
So without further ado, here are 3 things you can do with a DUNS number.
As noted above, company information in the D&B database is looked up via DUNS numbers. A DUNS number means a company can change hands yet creditors will still be able to find information on it. A company can move, or become incorporated, or dissolve a corporation. None of that matters; the DUNS number is all you need.
Dun & Bradstreet requires that you register on their site (registration is free) before they will give you a DUNS number. There are a few slightly different ways to get a DUNS if your business belongs to a special class, such as it is a US government contractor or grantee, or you are an Apple developer, or your company is Canadian.
Registration is simple. Once you agree to the Terms and Conditions, you are immediately taken to a dashboard where you either request a DUNS number or you look up to see if your business is already listed and then click on your business name in order to make any needed changes.
Having a D&B login gives you a lot of flexibility. You can:
Could you use the D&B site without a DUNS number? It’s not impossible. But having a DUNS number means you can use the D&B site to your fullest advantage. This is one of the things a DUNS number helps you do!
You can’t have business credit without a credit score.
Business credit is credit in a small business’s name. It doesn’t connect to an owner’s individual credit, not even if the owner is a sole proprietor and the only employee of the company.
Accordingly, an entrepreneur’s business and individual credit scores can be very different.
Considering that company credit is distinct from individual, it helps to safeguard an entrepreneur’s personal assets, in case of legal action or business insolvency.
Also, with two distinct credit scores, an entrepreneur can get two separate cards from the same vendor. This effectively doubles buying power.
Another benefit is that even startups can do this. Visiting a bank for a business loan can be a recipe for disappointment. But building small business credit, when done properly, is a plan for success.
Consumer credit scores rely on payments but also additional factors like credit use percentages.
But for business credit, the scores actually only hinge on whether a company pays its debts on time.
Building small business credit is a process, and it does not happen automatically. A company must actively work to develop company credit.
However, it can be done readily and quickly, and it is much swifter than building personal credit scores.
Vendors are a big aspect of this process.
Carrying out the steps out of sequence will result in repetitive rejections. No one can start at the top with business credit. For example, you can’t start with retail or cash credit from your bank. If you do, you’ll get a denial 100% of the time.
A company has to be fundable to lending institutions and merchants.
Therefore, a business will need a professional-looking website and email address. And it needs site hosting from a vendor like GoDaddy.
And, business telephone and fax numbers must have a listing on 411. Do that here: http://www.listyourself.net.
Likewise, the business telephone number should be toll-free (800 exchange or the equivalent).
A small business will also need a bank account devoted only to it, and it must have every one of the licenses necessary for running.
These licenses all have to be in the correct, appropriate name of the small business. And they must have the same business address and telephone numbers.
So keep in mind, that this means not just state licenses, but potentially also city licenses.
Learn more here and get started toward growing business credit.
Visit the IRS website and acquire an EIN for the company. They’re totally free. Select a business entity such as corporation, LLC, etc.
A company can get started as a sole proprietor. But they will probably want to switch to a form of corporation or an LLC.
This is in order to diminish risk. And it will take full advantage of tax benefits.
A business entity will matter when it concerns tax obligations and liability in case of a lawsuit. A sole proprietorship means the business owner is it when it comes to liability and tax obligations. No one else is responsible.
If you operate a business as a sole proprietor, then at the very least be sure to file for a DBA. This is ‘doing business as’ status.
If you do not, then your personal name is the same as the business name. As a result, you can wind up being directly accountable for all small business debts.
Plus, per the IRS, with this structure there is a 1 in 7 chance of an IRS audit. There is a 1 in 50 probability for corporations! Steer clear of confusion and significantly decrease the chances of an IRS audit as well.
Begin at the D&B website and get a free DUNS number. A DUNS number is how D&B gets a business into their system, to produce a PAYDEX score. If there is no DUNS number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s web sites for the company. Do this at www.creditsuite.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process.
In this way, Experian and Equifax will have something to report on. This is another one of those things a DUNS number helps you do.
A PAYDEX Score serves as Dun & Bradstreet’s dollar-weighted numerical rating of how your company has paid its bills over the past year. D & B bases their scoring on trade experiences as reported by various vendors (your company’s landlord, suppliers, etc. as they apply to your particular circumstances).
The Dun & Bradstreet PAYDEX Score is in a range from 1 to 100. As you might expect, higher scores mean a better payment performance. That is, your company pays its bills on time or early, it pays them as close to fully as possible, and you don’t borrow too much – all of these can keep your PAYDEX score in a better range.
Your PAYDEX score does not start to be figured until your company has a DUNS number. So that comes first.
First you ought to build trade lines that report. This is also known as the vendor credit tier. Then you’ll have an established credit profile, and you’ll get a business credit score.
With an established business credit profile and score you can begin to get credit in the retail and cash credit tiers.
These kinds of accounts tend to be for the things bought all the time, like marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.
But first of all, what is trade credit? These trade lines are credit issuers who will give you preliminary credit when you have none now. Terms are commonly Net 30, instead of revolving.
Hence, if you get approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, like within 30 days on a Net 30 account.
Net 30 accounts need to be paid in full within 30 days. 60 accounts need to be paid in full within 60 days. Compared to with revolving accounts, you have a set time when you have to pay back what you borrowed or the credit you made use of.
To launch your business credit profile the right way, you should get approval for vendor accounts that report to the business credit reporting bureaus. As soon as that’s done, use the credit.
Then pay back what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.
Not every vendor can help like true starter credit can. These are vendors that will grant an approval with minimal effort. You also want them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.
You want 5 to 8 of these to move onto the next step, which is the retail credit tier. But you may need to apply more than once to these vendors. So, this is to verify you are trustworthy and will pay in a timely manner. Here are some stellar choices from us: https://www.creditsuite.com/blog/5-vendor-accounts-that-build-your-business-credit/
Uline Shipping Supplies is a true starter vendor. Find them online at www.uline.com. They sell shipping, packing, and industrial supplies, and they report to D&B.
You need to have a DUNS number. They will request 2 references and a bank reference. The first few orders may need to be prepaid to initially get approval for Net 30 terms.
Quill is an additional true starter vendor. Find them online at www.quill.com. They sell office, packaging, and cleaning supplies, and they report to D&B and Experian.
Since Quill reports to two separate credit reporting agencies, you get two credit experiences with them. Place an initial order first unless the D&B score is established.
Typically they will put you on a 90-day prepayment schedule. If you order items each month for 3 months, they will ordinarily approve you for a Net 30 Account.
Grainger Industrial Supply is likewise a true starter vendor. Find them online at www.grainger.com. They sell safety equipment, plumbing supplies, and more, and they report to D&B. You will need to have a business license, EIN, and a DUNS number.
For less than a $1000 credit limit they will approve almost anybody with a business license.
Non-Reporting Trade Accounts can also be helpful. While you do want trade accounts to report to at the very least one of the CRAs, a trade account which does not report can nevertheless be of some worth.
You can always ask non-reporting accounts for trade references. And also credit accounts of any sort ought to help you to better even out business expenditures, thereby making budgeting easier. These are companies like PayPal Credit, T-Mobile, and Best Buy.
Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, then move to the retail credit tier. These are companies which include Office Depot and Staples.
Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use the business’s EIN on these credit applications.
One such example is Lowe’s. They report to D&B, Equifax and Business Experian. They need to see a DUNS and a PAYDEX score of 78 or more.
Are there 8 to 10 accounts reporting? Then move onto the fleet credit tier. These are service providers such as BP and Conoco. Use this credit to purchase fuel, and to repair, and take care of vehicles. Only use your Social Security Number and date of birth on these applications for verification purposes. For credit checks and guarantees, make sure to apply using the company’s EIN.
One such example is Shell. They report to D&B and Business Experian. They want to see a PAYDEX Score of 78 or more and a 411 business phone listing.
Shell may say they want a specific amount of time in business or profits. But if you already have adequate vendor accounts, that won’t be necessary. And you can still get approval.
Learn more here and get started toward growing business credit.
Have you been responsibly handling the credit you’ve gotten up to this point? Then move onto the cash credit tier. These are service providers such as Visa and MasterCard. Only use your SSN and date of birth on these applications for verification purposes. For credit checks and guarantees, use your EIN instead.
One example is the Fuelman MasterCard. They report to D&B and Equifax Business. They want to see a PAYDEX Score of 78 or better. And they also want you to have 10 trade lines reporting on your D&B report.
Plus, they want to see a $10,000 high credit limit reporting on your D&B report (other account reporting).
Additionally, they want you to have an established company.
These are companies such as Walmart and Dell, and also Home Depot, BP, and Racetrac. These are frequently MasterCard credit cards. If you have 14 trade accounts reporting, then these are feasible.
Know what is happening with your credit. Make sure it is being reported and fix any errors ASAP. Get in the practice of taking a look at credit reports and digging into the specifics, and not just the scores.
We can help you monitor business credit at Experian and D&B for only $24/month. See: www.creditsuite.com/monitoring.
At Equifax, monitor your account at: www.equifax.com/business/business-credit-monitor-small-business. Equifax costs about $19.99.
Update the details if there are inaccuracies or the info is incomplete. At D&B, go here: https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm. For Experian, go here: www.experian.com/small-business/business-credit-information.jsp . So for Equifax, go here: www.equifax.com/business/small-business.
So, what’s all this monitoring for? It’s to challenge any errors in your records. Mistakes in your credit report(s) can be taken care of. But the CRAs typically want you to dispute in a particular way.
Get your small business’s PAYDEX report at: www.dnb.com/about-us/our-data.html. Get your company’s Experian report at: www.businesscreditfacts.com/pdp.aspx?pg=SearchForm. And get your Equifax business credit report at: www.equifax.com/business/credit-information.
Disputing credit report mistakes usually means you mail a paper letter with copies of any evidence of payment with it. These are documents like receipts and cancelled checks. Never send the original copies. Always mail copies and keep the original copies.
Fixing credit report inaccuracies also means you specifically itemize any charges you dispute. Make your dispute letter as clear as possible. Be specific about the issues with your report. Use certified mail so that you will have proof that you sent in your dispute.
Dispute your or your business’s Equifax report by following the directions here: www.equifax.com/small-business-faqs/#Dispute-FAQs.
Dispute errors on your or your small business’s Experian report by following the instructions here: www.experian.com/small-business/business-credit-information.jsp.
And D&B only wants you to dispute via Customer Service. So the PAYDEX Customer Service telephone number is here: www.dandb.com/glossary/paydex.
Learn more here and get started toward growing business credit.
Always use credit responsibly! Don’t borrow more than what you can pay back. Keep track of balances and deadlines for repayments. Paying punctually and in full will do more to increase business credit scores than just about anything else.
Growing small business credit pays off. Excellent business credit scores help a business get loans. Your lending institution knows the company can pay its financial obligations. They recognize the small business is authentic.
The company’s EIN links to high scores and loan providers won’t feel the need to ask for a personal guarantee.
Experian and Equifax will start to build a file for your company once you’re in the D&B system – and you can’t be in the D&B system without a DUNS number.
So, what are you waiting for? Your business needs a DUNS number!