Business credit is vitally important and it is something that all businesses need to not only know about but also be well-versed in. If you’re a business looking to increase your credibility or get a DUNS number to do so, don’t worry, you’re at the right place! Find out all you need to know about getting your businesses a DUNS number and how you can ensure that your business has an impeccable financial reputation.
A Data Universal Numbering System or a DUNS number is something that is assigned to businesses so vendors and potential buyers can determine the reliability and financial stability of a business. In other words, it helps vendors and buyers decide your business’s credibility. So, let’s get into the specifics of why your business needs a DUNS number, the benefits of getting a DUNS number, how to get one, and everything in between.
Now, when it comes to credit scores, you already know about FICO and VantageScore which are companies that create credit score models by giving different levels of importance to different information in your credit reports. But, as an entrepreneur and business owner, you need to be familiar with the DUNS number which has to do with your business credit. A lot like your personal credit score, a DUNS number helps lenders, vendors, etc. gauge the financial reputation of your business.
In fact, according to Fundera reports, about 43% of businesses applied for loans out of which 36% were denied in some capacity due to their business credit scores. Moreover, about 29% of small businesses had to shut down due to running out of capital.
It is no surprise that having a strong financial foundation and credit for your business goes a long way and that is exactly why you need to be familiar with the DUNS number for your business. So, keep on reading to find out more.
What is a DUNS Number?
A Data Universal Numbering System or a DUNS number is a 9-digit number, similar to a social security number but for your business. A DUNS number is assigned to a business directly by the data and analytics services provider Dun & Bradstreet upon putting in a request. The DUNS number was introduced back in 1963 in an effort to help lenders, buyers, and business partners to establish the financial position and credibility of the business in question. Today, over 330 million businesses have a DUNS number.
Keep in mind that a DUNS number is different from your business federal tax identification (EIN) number which is used by the IRS for tax purposes. A DUNS number is a universal standard for businesses worldwide. It is also important to note that a DUNS number can be created for your business without your knowledge as well. To elaborate, if a third-party vendor wants to have information about the financial condition of your business, they can request a DUNS number without your consent. An ideal place to start when you’re looking to get a DUNS number is to make sure that you don’t already have one by going to the D&B website.
It is established that other third parties can use a DUNS number to determine whether they want to be in business with you or not. Similarly, if you are looking to partner with another business or company, you can use their DUNS number to help you decide if you want to start a professional relationship with them.
Should You Get a DUNS Number?
Getting a DUNS number is not mandatory for businesses. It is merely a tool that helps you enhance the creditworthiness of your business or company. Previously, you needed to have a DUNS number to get any kind of financial aid or loan from the government. However, that is no longer the case and you do not need to have a DUNS number for your business.
But, if you are looking to get one anyway, what is the best time to do so?
Ideally, you should get a DUNS number as soon as you start or establish your business legally. However, if you are already in business and want to get a DUNS number, you should start by checking if your business already has one. You can do this easily by going to the D&B website on their number lookup page.
Now, if you don’t have a DUNS number, you can request one on the same website. It is free to request and get a DUNS number.
How to Get a DUNS Number?
Once you are sure that you want a DUNS number for your business, follow the steps below to get one.
1. Check If Your Business Already Has a DUNS Number
As mentioned above, a lot of the time, your business might already have a DUNS number and you may just not be aware of it. If a third-party vendor has requested your business’s credit information, you might already have a DUNS number. This can easily be checked by going to the D&B website and entering basic information about your business such as its name, address, phone number, etc to get your DUNS number.
2. Gather All Your Information
In case you don’t have a pre-existing DUNS number, you can get one by simply filling out the D&B online application or even by calling their toll-free number at 1-(866) 705-5711. However, before applying for a DUNS number, you need to have a few things in order such as:
- The legal status of your business (LLC, Corporation, Partnership, etc)
- Business’s legal name
- Business’s year of establishment
- Business address (Both mailing and physical)
- Business Phone number
- Your primary services or products
- Number of employees
- Business owner’s name
3. Pay For Fast-tracking (Optional)
Once you’ve submitted your application to get your DUNS number, you will have to wait for up to 30 days to receive it. However, there is a paid option available if you want to fast-track the process. You can pay $229 to get your DUNS number within 5 business days. Note that D&B might fast-track the process for some businesses for free if they register as a part of a bid for a government grant or contract.
4. Transaction Reporting
After your DUNS number is established, your business credit information will be made public, like any legal judgments and bankruptcies. Most suppliers and vendors do not report to D&B directly; so, in case you want to include past transactions, you need to submit them yourself in exchange for a fee.
Benefits of Getting a DUNS Number
Getting a DUNS number may seem like a lot of work but wait until you hear about the amazing benefits you get with having one. From better credibility, to getting loans approved quicker, there are tons of advantages to having a DUNS number. Listed below are just some of the leverages you get by having one!
1. Separate Your Personal and Business Credit
By far, one of the biggest benefits of having a DUNS number is that you can easily separate your personal and business credit. To explain further, the separation of your business line of credit and your personal credit will keep your personal and business credit score independent from each other. A DUNS number is also great to have if your business deals with huge debts and you want to protect your personal finances.
2. Established Business Credibility
Having a DUNS number means that your business will have a stronger credit history over others. Since anyone who wants to do business with you can look up this information, it makes you more dependable and reliable than your competitors. You will also have an easier time getting loans approved if you have a DUNS number.
3. Better Terms
A DUNS number will also allow you to negotiate better terms when going into business with a new vendor or partner. When you are able to prove your creditworthiness as a business to anyone looking to do business with you, you can easily get better terms. This will allow you and your company to save more money which you can then reinvest back into your business.
4. Conduct Business Internationally
If you are looking to conduct business outside the US with different companies and governments, having a DUNS number will go a long way. Since the DUNS number is a universal standard for businesses all over the world, if you wish to expand or conduct business outside the US, many countries and companies will require you to have a DUNS number while submitting a bid. A DUNS number allows different businesses and governments to verify the financial stability and legitimacy of your business.
5. Eligibility For Certifications and Applications
With a DUNS number, you can apply for way more business certifications and applications than you would without one. For example, when you have a DUNS number, you can easily get an SSL certificate for your business website. A DUNS number will expedite the process of acquiring an SSL certificate since it eliminates the need to fax business information which can typically take days. So, if you’re an e-commerce business, getting a DUNS number is the way to go.
Ways to Increase Your DUNS Number
Now that you know all about the benefits of having a DUNS number, let’s talk about the scores that D&B give to different businesses with respect to their credit. Of course, having a DUNS number legitimizes your business and gives it more credibility. However, you have to keep in mind your score and rating. This score is probably the most important aspect of having a DUNS number as it is used as a deciding factor by lenders, partners, etc if they want to do business with you. So, listed below are some ways in which you can boost your DUNS number.
1. Ask Your Vendors to Report Payments To D&B
By asking your vendors to report payments directly to D&B, you make a strong payment track record. This adds to your reliability and is a strong indication of your financial stability as a business.
2. Don’t Overextend Your Business or Take on Large Debts
As a business, you should use your credit wisely. This means that you should not take on a heavy debt as it can seriously affect your score and add unnecessary financial stress to your business.
3. Don’t Miss Payments
It should be a no-brainer that missing payments have a huge impact on your DUNS score. If you repeatedly miss payments or are behind on a lot of payments, it will have a negative impact on your score. This can eventually lead to a hard time getting loans and vendors. So, make sure to always stick to a payment schedule.
4. Ensure that Your D&B File is Complete and Properly Updated
Make sure that your D&B file does not miss any crucial information and is up to date. Additionally, you can also opt for D&B’s credit builder program to help you boost your credit profile. The cost for this program can be a couple of hundred dollars a month but it can help you boost your credit profile faster.
5. Attach References in Your D&B Profile
It’s always a great idea to ask past vendors and lenders to leave reviews on your D&B profile. Having good references from people who have been in business with you in the past will give your profile the boost it needs and will also make you look more reliable to all potential new partners.
Keep in mind that having a DUNS number means that anyone who wants to do business with you can verify your credibility with just a few clicks. This is exactly why you need to have a DUNS score that reflects your reliability and credibility as a business. If you are looking to increase your DUNS score, get a DUNS number, or want to learn more about business credit, look no further.
Business Banking Company Reviews
Recently Updated Articles