The internet isn’t always a reliable source for lenders and potential customers to learn about your business. The reviews and business ratings that appear might not be accurate and the information on your page could be outdated.
There’s also hesitancy to trust online listings. In 2017, Google said that only less than 1 percent of all listings were fake. However, some experts are wary of that claim considering that number was about 70 percent higher just two years prior.
Fortunately, there’s a way you can set up an official account for your business that allows financial partners to get an accurate snapshot of your company and history.
What you need is a free D-U-N-S Number, issued from Dun & Bradstreet (D&B).
Who is D&B?
Dun & Bradstreet has been operating for 177 years, helping their customers and partners drive growth and improve business performance with data and analytics as the backbone of their business. With nearly 5,000 employees worldwide, they are an “established leader in commercial data and insight.”
As such, D&B is one of three credit report agencies that calculate business credit, alongside Experian and Equifax.
What is a D-U-N-S Number?
A D-U-N-S (data universal numbering system) number is a unique nine-digit value assigned to your business. It is generated by Dun & Bradstreet (D&B) as a way to provide accurate and up-to-date information about the financial health and history of any company that has registered.
D&B claims that more than 330 million global businesses have signed up for a D-U-N-S number.
Why a D-U-N-S Number is Important?
Think of your D-U-N-S number as a social security number for your business. If you personally apply for credit, banks or lenders can run your social security number to get accurate details about your finances and history.
A D-U-N-S number works the same way, although it’s not managed by the government. It provides lenders, customers, and potential business partners with a reliable score for your company that they can then use to determine financial stability and assess the risk involved with investing in or financing your business. In fact, the U.S. government requires that all businesses have a D-U-N-S Number if they want to apply for federal grants or cooperatives.
How To Get A D-U-N-S Number
The process for establishing your D-U-N-S Number from D&B is simple:
- Step 1: Check to see if a D-U-N-S Number has already been created for your business. You’ll need to input your business name and address with the D-U-N-S lookup tool.
- Step 2: If your number doesn’t currently exist, you can choose between a free registration, which may take up to a month to process, or a paid expedited registration, which generally takes from one to five days.
- Step 3: Once you receive your number, you can self-report information about your business to ensure that it’s accurate. You can also search for your business at any time on iUpdate to review the information on file.
After your D-U-N-S Number is set up and you start making business transactions, D&B will use that information to determine your business credit rating.
How D&B Scores Your Business
Just because you have a D-U-N-S number doesn’t mean your company is listed in good standing. Like a FICO credit rating for your personal finances, D&B created a PAYDEX Score that helps lenders determine the creditworthiness of a business with a D-U-N-S number.
PAYDEX uses the information collected by D&B to grade your business with a score from 1 to 100, which are broken into three categories:
- 0 to 49: High risk of late payment
- 50 to 79: Moderate risk of late payment
- 80 to 100: Low risk of late payment
In addition, D&B also generates a Delinquency Predictor Score (DPS) which forecasts the likelihood that your business will be late or default on payments. This score is on a scale from 1 to 5.
Ways to Improve Your Score
If you have a less favorable PAYDEX Score, you may be offered less money or a higher interest rate by lenders. The good news is that you can take steps to raise your PAYDEX Score using tactics to those for improving your personal credit, including:
- Make bill payments on time
- Avoid a high debt-to-asset ratio
- Keep your business credit active, even if it’s only for small loans
You should also monitor your PAYDEX Score so you can tell if there is something in your D-U-N-S Number that is inaccurate. You can also monitor your score using a tool called Credit Signal that provides notifications and alerts.
Help Your Business Grow with a D-U-N-S Number
If you’re serious about growing your business, it may be worth requesting a D-U-N-S Number. It only takes a few minutes and doesn’t cost you anything—unless you need the registration expedited. Having one will set you up with an opportunity to work with lenders and investors who can help you continue growing a thriving and successful business
Copyright © 2023 SCORE Association, SCORE.org
Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.