DUNS Number Can Help, Hurt Business
Businesses of all sizes spend billions of dollars every year to build their brands and bottom lines. Meanwhile, millions of these businesses are oblivious to their business credit report at Dun & Bradstreet, which can deprive them of important opportunities.
Lenders, vendors, insurance companies and prospective clients often check these credit reports as part of their due diligence. They use the reports from Dun & Bradstreet to investigate companies that they are thinking about doing business with. They use these credit reports for both credibility and creditworthiness. These companies and government agencies go to Dun & Bradstreet to make sure that your company is legitimate, viable, stable, reliable and big enough to handle the job. In fact, your business can’t apply for government contracts and grants without a DUNS number (business credit report).
Unfortunately, many small- and medium-sized businesses fail to create and manage their business credit reports, which can impact their brands and bottom lines in many ways. Such failures speak volumes about a business, while adding to the challenges in the marketplace.
Dun & Bradstreet has been the global leader in commercial credit reporting for more than 170 years. It holds credit reports for millions of companies around the world. If your company doesn’t have a credit report on file, you can apply for a DUNS number for free. D&B will host that file for the life of your business at no charge. The key is to make sure that your credit file is as accurate as possible and as influential as possible. This can help you separate your personal credit from your business credit, which will protect your FICO score and build your D&B scores and ratings.
Once your file has enough data, Dun & Bradstreet will generate scores and ratings for your business on nine different levels that measure the financial strength of your company. An organization’s business credit file is a collection of scores and ratings that allude to an organization’s ability to make good on contractual obligations. For example, the PayDex score indicates the timeliness that your company pays it bills.These scores and ratings can help or hurt a business in numerous ways:
- a business can use these metrics when deciding to contract with a supplier;
- a bank can use the information in a credit report when deciding to offer a loan;
- an insurance company might use your business credit report to decide whether or not to issue an insurance policy to your company and when calculating your premium; and
- business owners can use the scores themselves in an attempt to improve their credibility.
Other businesses may be using your DUNS number to make critical decisions that could help or possibly hinder your business. Proactively managing your credit report pays dividends in many ways.
D&B can help you beef up your credit report, while helping you keep a sharp eye on the creditworthiness of others. The key to generating strong scores and ratings is to build in as much positive payment history as possible (operating expenses). Operating expenses are proof that your business pays its bills in full and on time. It requires a paid service from Dun & Bradstreet to build in your positive payment history because D&B will put boots on the ground to verify your trade references and to manually build them into your credit report. It’s an investment that will pay dividends for many years to come. Credit-building is an important part of due diligence, risk management and reputation management.