As a business owner, your priority list should include your credit history. Establishing and managing it is essential, especially if you’re setting up payment terms with your suppliers, or seeking to take financing out to grow your business. While it may sound easy, it’s more complicated than you think.
Business owners are responsible for their credit history, and they can establish it by reporting to bureaus using their Data Universal Numbering System or DUNS number.
Read on for more discussion about Data Universal Numbering System and why your business needs a DUNS number.
DUNS Number, What Is It?
A DUNS number is a unique identifier for your business. The credit bureau Dun & Bradstreet creates this number and assigns it to your company for it to get identified across the globe. There are three most common credit bureaus for businesses, and Dun & Bradstreet is one of them. Data Universal Numbering System has become the standard system to identify companies from different parts of the world.
The DUNS number reveals so much about your business – the bank accounts that your business has, your business’ tax returns, and your business credit score.
Why Is It Significant To Obtain A DUNS Number?
The DUNS number directly ties to your company’s credit profile in D&B’s database. So, what happens is that when you’re applying for business credit with any lender, they’ll ask you for your DUNS number. The lender will use your DUNS number to obtain and check your business’s credit report and rating, based on the assessment of DUN & Bradstreet.
Remember that the DUNS number is unique to your business in the D&B database. While other business credit bureaus exist, like Equifax and Experian, they don’t share data with D&B. Each of them also uses a unique scoring system for credit reports. These agencies can have different assessments of your credit history in their database.
How A Data Universal Numbering System Works?
Dun & Bradstreet created the DUNS in 1983; They assign it to businesses across the globe as part of their credit reporting system. The Data Universal Numbering System became the standard for identifying federal government electronic commerce companies.
D& B’s database lists different companies, including small business owners, major corporations, partnerships, and even non-profit organizations. The users of the DUNS include the European Commission, the United Nations, and, of course, the United States government.
The DUNS number can provide essential information about the credit history of the business, including its official name, title, trade name, financial data, economic status, payment history, and executive names. The Dun & Bradstreet system also allows its members to search and check the credit information of other companies. It helps different businesses find potential partners, customers, and vendors. The federal government also uses DUNS numbers to track federal money disbursements.
D&B and the government don’t require businesses to register for a DUNS number; it’s voluntary. However, companies must obtain their DUNS numbers to bid on government, state, and local contracts and submit an application for credit with a lender or federal grants. The DUNS number also tells about your company’s credibility, helping you conduct business with local and international retailers, such as those based in the European Union and Australia.
Does Your Small Business Need To Have A DUNS number?
Many small business owners ask if they must obtain a DUNS number for their businesses. The answer is yes since it’s part of your effort to form a creditworthy business or company. If you want to improve the credibility of your business, you should establish positive credit ratings with Dun & Bradstreet and other major credit reporting agencies for companies.
When you apply your business with D&B to obtain a DUNS number, they will issue a nine-digit number that only identifies your company. Dun and Bradstreet will assess your credit and create a credit file for your business using the DUNS number assigned to you. It works similarly to the social security number, which identifies your credit reports as an individual.
How To Obtain A DUNS number?
It’s easy to obtain a DUNS number for your business if it doesn’t have one yet. You can use the option to get one for free but with a waiting period or use the paid service option if you want faster delivery of your DUNS number.
If you want to look up your DUNS number, you can do it using the lookup service of D&B through their website. It’s essential to check D&B’s website and verify if your business already has a DUNS number to avoid the hassle of doing the registration again. You can also obtain free credit file information about your business using Dun & Bradstreet CreditSignal.
After registering, conduct a search using D&B’s website to verify if your business already has a listing in its database. If the entry for your company already exists, check your DUNS number, review if your financial information and other details are correct, and update the existing credit file if necessary.
Are There Limitations With The DUNS number?
Once you successfully register your business, obtain your DUNS number, and provide data about your business, D&B then adds credit-related information like public findings, bankruptcies, and judgments to the credit history of your business. Ideally, suppliers and vendors must report all transactions to D&B, but the reality is that most don’t do it. Thus, if you want your operations on credit terms with suppliers and vendors to reflect your credit history, you’ll need to report your transactions with them. Take note, though, that you have to pay a certain amount since Dun & Bradstreet charges business owners a fee if they want to report credit details to influence the credit history of their businesses.
Your business needs a DUNS number, which you can obtain straightforwardly and for free. All you have to do is visit the website of Dun & Bradstreet and start the process from there. It’s an excellent way to improve the credibility of your business and makes it easier for other organizations to check and verify your company’s credentials, too. If your company already has a DUNS number, go to the D&B website, log into the interface, and update all the information regarding your company.