The Importance of Having A DUNS Number

You know a DUNS number can be advantageous for your business. If you’re ready to apply for a DUNS number, but want to learn more about it first and how to apply, consider this article your one-stop-shop.

If you're a business owner, you may have heard of a DUNS number before, but may not be sure what it is or how to apply for one. In short, a DUNS number is a unique nine-digit identification number used to track and monitor the creditworthiness of businesses around the world. It's a requirement for many government contracts, grants, and loans, and can also be used by lenders and suppliers to assess your business's creditworthiness.

In this blog post, we'll explain what a DUNS number is, why it's important to have one, and how to apply for a DUNS number for your business. Whether you're just starting out or looking to expand your business, having a DUNS number is an important step in establishing your business's creditworthiness and credibility.

What is a DUNS Number?

A DUNS number is a unique nine-digit identification number that is assigned by Dun & Bradstreet (D&B) to businesses, organizations, and government entities. It stands for "Data Universal Numbering System" and is widely used as a standard business identifier in the United States and around the world. The DUNS number is used to maintain a comprehensive database of businesses and their financial performance, which is used by credit agencies, lenders, and other organizations to evaluate creditworthiness, risk, and financial stability.

The primary purpose of a DUNS number is to facilitate business-to-business (B2B) transactions, especially those involving credit or financing. A DUNS number allows businesses to establish credit with suppliers, obtain loans and financing, bid on government contracts, and participate in other financial transactions. It also helps businesses to establish credibility and visibility in the marketplace by providing a standardized identifier that is recognized by other businesses and organizations.

How Are DUNS Numbers Used?

DUNS numbers are used by businesses and organizations to establish creditworthiness, track their financial performance, and provide other organizations with a standardized way to identify and learn about them. Here are some specific ways that DUNS numbers are used:

• Creditworthiness: DUNS numbers are used by credit reporting agencies, lenders, and other organizations to assess the creditworthiness of a business or organization. Having a DUNS number can help businesses establish credit and secure financing.
• Business identification: DUNS numbers are used by government agencies, suppliers, and other organizations to identify businesses and track their activities. For example, the federal government requires businesses to have a DUNS number in order to bid on contracts.
• Business intelligence: DUNS numbers provide a standardized way for organizations to access and share information about businesses. This can include financial data, industry classifications, and other key information that can help organizations make informed decisions.
• Compliance: DUNS numbers are sometimes used to verify compliance with regulatory requirements. For example, some government agencies require businesses to have a DUNS number in order to apply for licenses or permits.

Requirements for Businesses Applying for A DUNS Number

Even though applying for a DUNS number is free and fairly simple, there are some simple things a business should have handy before applying:

1. Business registration: The business must be legally registered with the appropriate government agencies. This typically involves obtaining a business license or registering with the Secretary of State's office.
2. Physical address: The business must have a physical address where it conducts its operations. A post office box is not sufficient.
3. Phone number: The business must have a phone number that can be verified.
4. Legal structure: The business must have a legal structure, such as a sole proprietorship, partnership, LLC, or corporation.
5. Credit history: The business must have some credit history, even if it's just a few accounts.
6. Financial statements: The business may be required to provide financial statements or other documentation to verify its financial stability.
7. Tax ID number: The business must have a tax identification number (TIN) or employer identification number (EIN) assigned by the IRS.

It's important to note that not all businesses are eligible for a DUNS number. For example, non-profit organizations, government agencies, and individual sole proprietors may not be eligible. Additionally, businesses located in certain countries may have different requirements for obtaining a DUNS number.

How To Apply For A DUNS Number

You can apply directly for a DUNS number through Dun & Bradstreet’s website. You will need to provide basic information about your business and may be asked to further identify yourself and your business with your business registration or tax identification number. You can fill out and submit an application right on their website.

Once your application is approved, Dun & Bradstreet will assign a unique nine-digit DUNS number to your business and provide you with a DUNS report that includes information about your company's creditworthiness, financial performance, and other key data.

It's worth noting that in some cases, your business may already have a DUNS number assigned if it has interacted with Dun & Bradstreet or other companies that use DUNS numbers in the past. In this case, you can search for your company's DUNS number using the Dun & Bradstreet website or by contacting customer service.

Tips for A Successful DUNS Number Application

It may seem as simple as filling out the application and waiting for your result, but there are a few key things you can do to help ensure your application is a successful one. Here are 7 of them:

Check for existing DUNS number: Before applying for a DUNS number, check to see if your business already has one. This may be the case if your business has ever applied for credit or contracts, or if your business has been in operation for several years. You can check for this on the Dun & Bradstreet website.

Gather required information: Make sure you have all the required information ready before you begin the application process. This may include your business name, legal structure, physical address, phone number, tax ID number, and financial statements.

Be accurate and consistent: Make sure all the information you provide on the application is accurate and consistent. Any discrepancies or errors may delay the application process or result in the application being rejected.

Provide complete information: Provide as much information as possible on the application, including information about your business's history, operations, and financial stability. This will help the credit reporting agency build a complete and accurate credit profile for your business.

Respond to follow-up inquiries: If the credit reporting agency has any follow-up inquiries or requests for additional information, respond to them promptly and thoroughly.

Be patient: The DUNS number application process may take several days or even weeks to complete. Be patient and allow enough time for the application to be processed.

Follow up: If you haven't received your DUNS number within the expected timeframe, follow up with Dun & Bradstreet to check on the status of your application.

Benefits of Having A DUNS Number

Having a DUNS number for your business can definitely elevate your business and provide you with opportunities you may not otherwise have. Here are several benefits of securing a DUNS number for your business:

1. Establishing business credit: A DUNS number can help establish a credit profile for your business, which can be important when applying for loans, credit lines, and other forms of financing. You can develop business credit without a DUNS number; however, acquiring a DUNS number can elevate you into new opportunities for your business when it comes to credit.
2. Enhancing credibility: Having a DUNS number can enhance your business's credibility in the eyes of potential partners, customers, and suppliers. It can signal that your business has been verified by a reputable third-party organization.
3. Access to government contracts: Many government agencies and contractors require businesses to have a DUNS number before they can bid on contracts. Having a DUNS number can help your business tap into these opportunities.
4. Building relationships with suppliers: Some suppliers and vendors may use a DUNS number to screen potential business partners. Having a DUNS number can help build trust with suppliers and increase your chances of being accepted as a partner.
5. Increasing visibility: Dun & Bradstreet maintains a database of businesses that have DUNS numbers, which can be used by other businesses and organizations to search for potential partners, suppliers, and customers. This instantly makes you visible in a credible search engine.
6. Benchmarking against competitors: D&B provides businesses with benchmarking tools that allow them to compare their performance against industry standards and their competitors. This can be beneficial in that you can learn what to better as a business and what can set you apart from the rest in your industry.
7. Access to business information: Dun & Bradstreet provides businesses with a range of business intelligence tools that can help them make informed decisions about potential partners, suppliers, and customers. Having a DUNS number can give you access to these tools, and aid you in making better-informed decisions for your business.

Who Requires A DUNS Number?

You’ve learned all about how to apply for a DUNS number and how advantageous it can be for your business. However, there are some scenarios in doing business where a DUNS number is actually required. Here are some examples:

Government contractors: Businesses that want to bid on government contracts or apply for grants from federal agencies are often required to have a DUNS number.

International trade: If you plan to do business with companies or organizations outside of the United States, you may need a DUNS number to register with the International Organization for Standardization (ISO) or other international trade groups.

Credit reporting agencies: Credit reporting agencies, such as Experian, Equifax, and TransUnion, may use a DUNS number to identify a business when it applies for credit.

Business credit issuers: Some credit card companies, such as American Express and Discover, may use a DUNS number to verify a business's creditworthiness before issuing a credit card.

Other businesses: Some businesses may require their suppliers or partners to have a DUNS number to ensure that they are legitimate and have a good credit history.

How Does a DUNS Number Impact a Business Credit Report?

A DUNS number can have a significant impact on a business credit report. Business credit reporting agencies, such as Dun & Bradstreet, Experian, and Equifax, use a business's DUNS number to identify and track its credit history.

When a business applies for credit, the lender may check the business's credit report to assess its creditworthiness. The credit report includes information about the business's credit history, payment history, outstanding debts, and other financial data.

Having a DUNS number can help ensure that the credit report is accurate and complete. It can also help establish a credit history for the business, which is important when applying for loans, credit lines, and other forms of financing.

Businesses with a DUNS number may also be eligible for credit products that are specifically designed for businesses, such as business credit cards and lines of credit. These products may offer more favorable terms and lower interest rates than personal credit products.

Finally, a DUNS number can help businesses build credibility with suppliers, partners, and customers. Suppliers and partners may use a business's DUNS number to verify its legitimacy and creditworthiness, while customers may see a DUNS number as a sign of professionalism and stability.

A DUNS number isn’t required for businesses in most scenarios, but can definitely give your business a lift up when it comes to credit-related opportunities.

What If I Don’t Have A DUNS Number For My Business?

It is apparent that a DUNS number brings many benefits to your business. What are the drawbacks if you don’t have one? Here are a few we found:

• Limited access to government contracts: If your business does not have a DUNS number, it may not be eligible to bid on government contracts or apply for grants from federal agencies.
• Limited access to business credit: Without a DUNS number, your business may have difficulty establishing a credit profile or accessing credit products that are specifically designed for businesses.
• Limited credibility with suppliers and customers: Not having a DUNS number may make it more difficult to establish trust with suppliers and customers, who may see a DUNS number as a sign of professionalism and stability.
• Limited visibility: Without a DUNS number, your business may not be included in D&B's database of businesses, which can limit your visibility to potential partners, suppliers, and customers.
• Limited benchmarking: Without a DUNS number, your business may not be able to access benchmarking tools that allow you to compare your performance against industry standards and your competitors.

Is a DUNS Number the Same as a Federal Tax ID Number?

A federal tax ID number, called your employer identification number (EIN), and a DUNS number serve different functions and are used for unique business purposes.

The EIN, provided by the IRS, acts as a taxpayer ID for businesses. It's essential for filing business taxes and is also used when setting up a business bank account, obtaining a business credit card, or securing a business loan. Some businesses must obtain an EIN for taxation reasons.

Conversely, a DUNS number is designed for other businesses and potential lenders to evaluate your company's financial standing. It's unrelated to taxation and isn't a legal requirement for businesses. However, certain contracts, grants, or loans may necessitate its possession.

Bottom Line

All in all, a DUNS number is only beneficial to your business, it is free and simple to apply for one, and it can provide you with credit opportunities your business may not have otherwise.

Frequently Asked Questions

How long does it take to get a DUNS number?

Obtaining your DUNS number might require a wait of up to 30 working days post-application. However, for a fee of $229, you can expedite the process and receive it within eight business days.

Does a DUNS number expire?

A DUNS number assigned to your business is permanent and doesn't expire. It remains associated with your business even if the location shuts down or the business ceases operations.

Does every business need a D-U-N-S Number?

While having a D-U-N-S Number isn't mandatory for running a business, it can be beneficial in reaching certain objectives. Some organizations or agencies might request it when you seek collaboration. Additionally, financial institutions might use it to access relevant data when considering you for a business loan.

How do I build business credit with my DUNS number?

After obtaining your DUNS number and setting up your business, it's time to build your business credit. Initiate by opening a business bank account, ensuring a clear distinction between personal and business finances. Consistently paying expenses, like vendor bills, on time is pivotal. Consider acquiring a business credit card that contributes to your credit history, preferably one tailored to enhance your business credit.

About The Author

Bryan Huynh

Product Tester & Writer

Bryan Huynh, a committed Product Tester and Writer, ensures that you are well-informed, guiding you in discovering and comparing top-rated financial services, including personal loans, business loans, credit repair, and tax relief.

Articles by Bryan Huynh

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