Your Business Credit Profile with Dun & Bradstreet

You need to set up your business credit profile with Dun & Bradstreet. Dun & Bradstreet keeps data on hundreds of millions of businesses around the world. And you want your small business to be one of them.

Why? Because D & B is one of the three big business credit reporting agencies (the other two are Equifax and Experian), and the more complete your profile is, the more complete their report on your business will be. And a more complete report can’t help but to be more accurate. Dun & Bradstreet wants your business’s credit report to be accurate – and so do you.

What’s in your business credit profile with Dun & Bradstreet? It includes direct investigations and interviews with company principals (such as self-reported data) and any other companies that you do business with.

Your Business Credit Profile with Dun & Bradstreet: The D-U-N-S number

First things first! Your first stop is to get a nine-digit Dun & Bradstreet D-U-N-S number. This unique identifying number is used to establish a business credit file with D & B. Lenders and potential business partners frequently reference such a file in order to help predict the reliability and/or financial stability of your company. A D-U-N-S (Data Universal Number System) works in order to keep accurate and timely data on over 265 million businesses around the globe.

From an identification standpoint, it makes a great deal of sense. After all, yours might not be the only Joe’s Restaurant in Wisconsin. By using this identifier, errors are minimized and Dun & Bradstreet will never confuse your business with someone else’s.

Dun & Bradstreet requires that you register on their site (registration is free) before they will give you a D-U-N-S number. There are a few slightly different ways to get a D-U-N-S 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 and, once you have agreed to the Terms and Conditions, you are immediately taken to a dashboard where you either request a D-U-N-S 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.

But get that D-U-N-S – otherwise, you won’t ever have a business credit profile with Dun & Bradstreet.

Your Business Credit Profile with Dun & Bradstreet: Expediting Getting a D-U-N-S number

If you don’t want to wait and deal with any paperwork, D & B offers a service called DUNS File whereby you can get a D-U-N-S number and a basic business credit file in 5 days. The current cost is $299. Without this service, it can take up to 30 days to get your company’s D-U-N-S number.

Your Business Credit Profile with Dun & Bradstreet: Using the D & B Site

Having a D & B login gives you a lot of flexibility. You can:

• Review and update your existing Dun & Bradstreet credit report
• Review and dispute any inaccurate payment experiences reported to D & B
• Update your company’s financial statement and other information
• Review and dispute any public filing information concerning your business, and
• View and print a copy of your Dun & Bradstreet credit report

Your Business Credit Profile with Dun & Bradstreet: Building Credit with Dun & Bradstreet

D & B also offers CreditBuilder Plus. It currently costs $159/month and includes DUNS File as one of its benefits. This product also allows for unlimited access to ratings and scorings, and enables you to add positive experiences to your credit file. You get alerts when others have accessed your credit file, and you even get access to LegalZoom.

Your Business Credit Profile with Dun & Bradstreet: Credit Alerts

If you prefer a free version, you can get CreditSignal. This product can show you how your business activities are affecting your credit score, so you’ll know when to take action. Like with CreditBuilder Plus, you’ll get an alert whenever others have accessed your credit file. This version allows you to access D & B’s mobile app CreditReporter.

You get free alerts to changes to your D & B scores, which includes PAYDEX. You also get a monthly summary with an overview of changes in your report (this report just shows changes; if you want the specifics, you’ll have to pay for one of D & B’s credit building or business credit monitoring solutions).

The last two are not strictly necessary, but they’re helpful.

Keep your business protected with our professional business credit monitoring.

Your Business Credit Profile with Dun & Bradstreet: Bonus: Reading Your Reports

A Dun & Bradstreet Report (also known as a D&B Report) is a database-generated report. The business services giant produces such a report in order to assist its clients in making decisions regarding new credit applications.

The main reason for a client making use of such a report is to engage in credit risk monitoring of vendors, suppliers, and business partners. This helps companies make informed business credit determinations and avoid bad debt.

Dun & Bradstreet takes several factors into account in generating such a report. These include a predictor of payment delinquency; how financially stressed a company is compared to similar businesses; an assessment of supplier risk; credit limit recommendation; D&B rating; and PAYDEX score. Let’s look at all these factors in turn.

Delinquency Predictor

Dun & Bradstreet uses predictive models to determine how likely a company is to be delinquent with its payments. Predictive scoring is a method of using historical data in order to try to predict future outcomes. It entails identifying the risks inherent in a future decision. It does this by examining the relationship between historical information and the future event.

This represents an objective and statistically derived counterpart to subjective and intuitive assessments. Such scoring allows a business to rank and order accounts based upon the probability of an event taking place, such as delinquent payments. However, note that Predictive Scoring only represents a statistical probability, and not a guarantee.

Financial Stress Percentile

The Financial Stress Percentile compares the company in question to other businesses in the same region, business sector, amount of employees, or number of years in the business. Financial Stress Score Norms show an average score and percentile for all firms with similar demographic characteristics. These Norms can be utilized in order to benchmark where this particular business stands in relation to the norm for its peer group.

Financial Stress Score

Dun & Bradstreet generates Financial Stress Scores to forecast the likelihood of business failure over the next twelve months.

D&B defines business failure in several ways. One is as a company which gets legal relief from its creditors. Another is a company which stops its business operations without paying all of its creditors in full. Yet another is a firm which voluntarily withdraws from its business operations thus leaving unpaid obligations

Another way is a firm which enters into receivership or reorganization. Or it can be a business which makes some form of arrangement for the benefit of its creditors. And all of this is based on the information found inside D&B’s commercial database.

The score ranges from 1,001 to 1,875. A score of 1,001 stands for the highest probability while a figure of 1,875 exemplifies the lowest probability of business failure.

If your business has a lot of lawsuits and liens against it, those will negatively impact your financial stress score.

Keep your business protected with our professional business credit monitoring.

Financial Stress Risk Class

This is a division of the scored universe into five distinct groups, ranging from 1 to 5. A 1 represents businesses which have the lowest probability of failure, while a 5 represents firms which have the highest probability of failure.

This Class makes it so a customer can quickly segment their new and existing accounts into various risk segments. This is to determine suitable marketing or credit policies. For any businesses indicated as being Discontinued at This Location; Higher Risk; or Open Bankruptcy, those records automatically get a 0 score.

Financial Stress Score Percentile

A Financial Stress Score Percentile is shown as a 1-100 ranking where a 1 percentile has the highest probability of failure and a 100 percentile has the lowest probability of failure.

A financially stressed company is defined as a firm which has certain characteristics. It may have ceased operations following assignment of bankruptcy. Another possibility is it has voluntarily withdrawn from business operation leaving unsettled obligations.

Yet another possibility is it has ceased operations with loss to creditors. Or it could be in receivership or reorganization. Or it may have made some sort of an arrangement for the benefit of its creditors.

Supplier Evaluation Risk Rating

The Supplier Evaluation Risk Rating (also called a SER Rating) forecasts how probable it is that a company will get legal relief from its creditors or discontinue its operations without paying creditors in full over next twelve months. The SER rating comes from D&B’s Financial Stress Score. The Financial Stress Score percentile serves as the basis for the SER Rating.

Once the Financial Stress Score percentile is calculated for a company, a second set of rules are applied to figure the SER Rating. The SER Rating provides a probability of worldwide supplier failure. Local nations’ failure ratings are shown via a Class of 1 – 9. A 1 represents businesses with the lowest probability of supplier failure. A 9 represents companies with the highest probability of supplier failure.

Keep your business protected with our professional business credit monitoring.

Credit Limit Recommendation

A D&B Credit Limit Recommendation includes two recommended dollar guidelines:

1. A conservative limitation, suggesting a dollar benchmark if a company’s policy is to extend less credit to decrease risk and
2. An aggressive restriction, suggesting a dollar benchmark if a firm’s policy is to extend more credit with potentially more risk.

These dollar guideline amounts are based on a historical analysis of the credit demand of customers in the U.S. payments database who have a similar profile to the firm being evaluated, with respect to employee size and industry. The guidelines do not address if a certain company can pay that amount or if a particular client’s total credit limit was achieved.

Each set of limits comes with an assessment of the risk category a business falls into, or D&B’s assessment of how likely they are to continue to pay their obligations within the agreed-upon terms and how likely they are to undergo financial stress in the next twelve months.

D&B Rating

A D&B Rating is designed to help businesses rapidly assess a business’s size and composite credit appraisal. The rating is based upon information in a company’s interim or fiscal balance sheet, plus an overall evaluation of the firm’s creditworthiness.

Rating Classifications

5A to HH Rating Classifications show company size based on worth or equity as calculated by Dun & Bradstreet. The figure is important because a firm’s size can be a reliable indicator of credit capacity. Dun & Bradstreet assigns such ratings to companies which have supplied a current financial statement.

Composite Credit Appraisal

This is a number, 1 through 4, and it comprises the second half of a firm’s rating. It reflects Dun & Bradstreet’s overall assessment of that company’s creditworthiness. Dun & Bradstreet’s analysis of company payments, financial information, public records, business age and other important factors, when available, are interpreted in order to generate a Composite Credit Appraisal.

When a company does not provide current financial information, they cannot get a Composite Credit Appraisal rating of better than a 2. Moreover, the 1R and 2R Rating categories indicate company size based on the total number of employees for the firm.

These rating categories are assigned to company files which do not have a current financial statement. Employee Range (ER) Ratings apply to certain lines of business not lending themselves to classification under the D&B Rating system. These kinds of companies are assigned an Employee Range symbol based upon the number of employees and nothing else.

As a whole, when Dun & Bradstreet does not have all of the information they need, they will signify as much in their reports. However, the omission of some pieces of information does not necessarily mean a particular firm is a poor credit risk.

PAYDEX Score

A PAYDEX Score is Dun & Bradstreet’s proprietary dollar-weighted numerical indicator of how a business has settled its bills over the past year. The score is based upon trade experiences reported to Dun & Bradstreet by various vendors. In addition, the D&B PAYDEX Score ranges from 1 to 100; higher scores indicate a better payment performance.

D&B Data

Finally, any report is only as good as the data it comes from. Dun & Bradstreet’s database contains over 250 million companies spanning the globe, which includes around 120 million active firms and about 130 million firms which are out of business but kept for historical reasons.

D&B constantly gathers data and works to improve its analyses to assure the greatest degree of accuracy possible.

Your Business Credit Profile with Dun & Bradstreet: Takeaways

In particular, if your business is already on the D & B site, it quite literally pays to use that time and check on your business credit score. You want your business credit profile with Dun & Bradstreet to be the best it can be. Learn more here and get started toward setting up your business credit profile with D&B.