How to Build a Dun & Bradstreet
Credit Profile
by Lisa Phillips
April 2008
Credit Profile
by Lisa Phillips
April 2008
| Copyright RebuildCreditScores 2008. All Rights Reserved |
Establishing an excellent Dun & Bradstreet credit profile will help you build
business credit much faster and easier. Hopefully you have completed the
preliminary process in building business credit and have a few vendors who
report to Dun & Bradstreet.
business credit much faster and easier. Hopefully you have completed the
preliminary process in building business credit and have a few vendors who
report to Dun & Bradstreet.
Establish at least one Business Tradeline
Your business has been incorporated, you have an employer identification
number (EIN), business telephone number, business checking account and
a business license or permit, it is time to establish your first business trade-
line account. As suggested in “10 Steps to Build Business Credit” Staples
will open a business account for your company. Once you have established
that business account and made at least one payment you can begin
building your D&B credit profile.
Apply for a D-U-N-S number
Now that you have your business trade-line account and made a payment,
apply for a D-U-N-S number. This can be done online: www.dnb.com. There
is no cost to getting a D-U-N-S number. The process can take up to 30
days. You can obtain a D-U-N-S number immediately by paying for their
credit builder services but it is not necessary. D&B employs very
aggressive sales people who may lead you to believe you must purchase
their credit builder services. But a D-U-N-S Number can be assigned in as
little as 1 business day for all businesses required to register with the US
Federal government for contracts or grants. If you do decide to purchase
the credit builder products keep in mind the prices are negotiable. Currently
D&B is asking from $329.00 to $799.00 for their various credit builder
services products. Negotiate a lower price.
Cover all your Bases
Dun & Bradstreet will research your company to create your credit profile.
They may look in the yellow pages, call 411 directory, call your actual place
of business, verify you have a business bank account, look at your State’s
corporation records and even verify you have a business license. Make
sure your business name, address and telephone number are exact in all
the places you use them. All documentation with your business name,
address and telephone number must match. Your business telephone
number must be answered in the exact name of your business. It is
imperative that you use your business name exactly the same way on every
document, application, listing, etc. Make sure the world knows your exact
business name and physical location.
Add your D-U-N-S Number to your Business Tradeline
Once you receive your D-U-N-S number call your business tradeline and
request to have your D-U-N-S number added to your credit file. When that
business tradeline reports to Dun & Bradstreet your payment history will be
reported to your D&B credit profile under D-U-N-S number. Be patient, it
may take up to 45 days for your payment history to be reported to your new
D-U-N-S number.
Apply for New Business Tradeline Accounts
Your goal should be to have five to six active business tradelines with an
excellent payment history. Do not apply for all business accounts at the
same time. This may get your business credit file flagged. Allow a few
weeks between each application. A good idea before applying for any
tradeline is to call and inquire about their underwriting requirements. See if
they extend credit to new businesses without a personal guarantee. The
following companies have been known to extend credit without requiring a
personal guarantee:
Pre-Existing Business Tradelines
For those business owners who have existing established business
tradelines with their personal credit history, you can still establish a Dun &
Bradstreet credit profile. After you apply for a D-U-N-S number contact
each of your business creditors and request your existing business
accounts be reported to Dun & Bradstreet under your D-U-N-S number.
Make sure your credit histories are exemplary with those pre-existing
business tradelines.
Dun & Bradstreet eUpdate Services
Monitor your credit profile with Dun & Bradstreet by checking your credit
report with eUpdate. This service is offered by D&B once you have
established a D&B credit profile and you can check the information
contained in your credit report. Correct any errors you find in your D&B
credit profile.
Paydex Scores
A Paydex Score is a unique dollar-weighted numerical indicator of how
a business pays its bills based on tradelines reported to Dun & Bradstreet
by various vendors. The D&B Paydex Score ranges from 1 to 100, with
higher scores indicating better payment performance. Paydex scores of 80
and above are considered very good. It is somewhat similar to FICO scores
for personal credit but you have greater control as to how you are rated.
Paydex Scores are counted in days. So if you pay your invoices 5 days
after you receive the bill it will be reported as such. If you pay your
invoices in full before the bill arrives in the mail it will be reported.
Conversely, if you pay your bills 14 days late it too will be reported. The
bottom line is to pay your invoices on time or before they are due and you
will get a higher Paydex Score. You can drive your score up by using your
tradelines each month and paying your invoices immediately.
Business Checking Account Balances
If you plan to seek business loans and lines of credit your account balance
matters. In order to be in a good position for applying for loans, your
average daily balance should be at least $10,000 for the prior 3 months.
Your business bank account acts as a measure of how your business
manages cash flow. Banks want to be sure your business can consistently
handle debt and expenses. Non Sufficient Fund (NSF) charges are a big
red flag. Avoid them at all costs.
Business Credit Cards and Loans
Now that you have been building a Paydex score of 80 or above based on
your payment history, it’s time to start applying for major credit cards,
business loans and even lines of credit. Most banks and credit card
companies require you to be in business for two or more years; however,
you have a built a relationship with your banker, you can some times get
around this requirement. Visit your bank and let them know you wish to
open a credit card or line of credit based upon your excellent Paydex
scores. See where they stand on extending credit without personal
guarantees. If your business bank account is in good standing and shows
steady growth you may be able to obtain credit without personal
guarantees.
Secured Business Credit Cards and Loans
Your bank may be unwilling to extend credit without a personal guarantee if
you have been in business less than two years. In this case, get a secured
business credit card or business loan without a personal guarantee. Aim for
repayment terms of 6 months or less. You do not want to set-up a long term
business loan while attempting to build business credit. Pay the loan
obligation in its entirety before the end of the loan term. For instance, if you
set up a 6 month repayment terms, pay off the loan in 5 months. The bank
will report your payments to Dun & Bradstreet and it will not show it as a
secured loan. Once the bank begins to report your business credit history
to D&B, other business credit providers will see how much you borrowed
and will more than likely give you comparable amounts of credit. Once you
pay off the loan, wait a few weeks and request another loan for a higher
amount and pay that one off early also.
Several credit card companies will extend secured business credit cards.
These credit cards will not report as secured. The good thing about
secured cards is that you determine your credit limit. Whatever the amount
you have to secure the credit card will be your limit. It will report to your
D&B file as a business credit card, not a secured business credit. Make
sure you pay in full each month to build your Paydex score. Wait a couple
of months, after your credit payment history has been reported, to apply for
another secured business credit card.
Establish a Good Credit Mix
As with personal credit, you need to create a good mix of credit for your
business. In order to build a good business credit profile you should have
a mix of active business tradelines (5 or 6), several business credit cards
and at least two small business loans which have been paid in full.
Business Lines of Credit
Your company has taken all the necessary steps to build a good business
credit rating. You are between the 18th month to 2 year mark and it is time
to apply for a business line of credit. Begin with the banking institution
where you received your business loans. Hopefully by now you have an
inside track to your bank’s business loan officer. Apply for a business line
of credit solely upon your excellent business credit rating. Remember to
keep at least $10,000 in your business checking account at all times. It
shows the bank you have a good cash flow and can manage your debts
well. You don’t necessarily have to use the line of credit once you are
approved; however, it’s always good to have as an emergency fund.
Your business has been incorporated, you have an employer identification
number (EIN), business telephone number, business checking account and
a business license or permit, it is time to establish your first business trade-
line account. As suggested in “10 Steps to Build Business Credit” Staples
will open a business account for your company. Once you have established
that business account and made at least one payment you can begin
building your D&B credit profile.
Apply for a D-U-N-S number
Now that you have your business trade-line account and made a payment,
apply for a D-U-N-S number. This can be done online: www.dnb.com. There
is no cost to getting a D-U-N-S number. The process can take up to 30
days. You can obtain a D-U-N-S number immediately by paying for their
credit builder services but it is not necessary. D&B employs very
aggressive sales people who may lead you to believe you must purchase
their credit builder services. But a D-U-N-S Number can be assigned in as
little as 1 business day for all businesses required to register with the US
Federal government for contracts or grants. If you do decide to purchase
the credit builder products keep in mind the prices are negotiable. Currently
D&B is asking from $329.00 to $799.00 for their various credit builder
services products. Negotiate a lower price.
Cover all your Bases
Dun & Bradstreet will research your company to create your credit profile.
They may look in the yellow pages, call 411 directory, call your actual place
of business, verify you have a business bank account, look at your State’s
corporation records and even verify you have a business license. Make
sure your business name, address and telephone number are exact in all
the places you use them. All documentation with your business name,
address and telephone number must match. Your business telephone
number must be answered in the exact name of your business. It is
imperative that you use your business name exactly the same way on every
document, application, listing, etc. Make sure the world knows your exact
business name and physical location.
Add your D-U-N-S Number to your Business Tradeline
Once you receive your D-U-N-S number call your business tradeline and
request to have your D-U-N-S number added to your credit file. When that
business tradeline reports to Dun & Bradstreet your payment history will be
reported to your D&B credit profile under D-U-N-S number. Be patient, it
may take up to 45 days for your payment history to be reported to your new
D-U-N-S number.
Apply for New Business Tradeline Accounts
Your goal should be to have five to six active business tradelines with an
excellent payment history. Do not apply for all business accounts at the
same time. This may get your business credit file flagged. Allow a few
weeks between each application. A good idea before applying for any
tradeline is to call and inquire about their underwriting requirements. See if
they extend credit to new businesses without a personal guarantee. The
following companies have been known to extend credit without requiring a
personal guarantee:
- UPS
- FedEx-Kinkos
- Barnes & Noble
- Quill Corporation
- Rapid Forms
- Nebs
- Fry’s Electronics
- Office Depot
- Home Depot
- T-Mobile
- Sprint
- Lowes
- Uline
- Chevron
- Union 76
- Exxon Mobil
- Dell Computer
Pre-Existing Business Tradelines
For those business owners who have existing established business
tradelines with their personal credit history, you can still establish a Dun &
Bradstreet credit profile. After you apply for a D-U-N-S number contact
each of your business creditors and request your existing business
accounts be reported to Dun & Bradstreet under your D-U-N-S number.
Make sure your credit histories are exemplary with those pre-existing
business tradelines.
Dun & Bradstreet eUpdate Services
Monitor your credit profile with Dun & Bradstreet by checking your credit
report with eUpdate. This service is offered by D&B once you have
established a D&B credit profile and you can check the information
contained in your credit report. Correct any errors you find in your D&B
credit profile.
Paydex Scores
A Paydex Score is a unique dollar-weighted numerical indicator of how
a business pays its bills based on tradelines reported to Dun & Bradstreet
by various vendors. The D&B Paydex Score ranges from 1 to 100, with
higher scores indicating better payment performance. Paydex scores of 80
and above are considered very good. It is somewhat similar to FICO scores
for personal credit but you have greater control as to how you are rated.
Paydex Scores are counted in days. So if you pay your invoices 5 days
after you receive the bill it will be reported as such. If you pay your
invoices in full before the bill arrives in the mail it will be reported.
Conversely, if you pay your bills 14 days late it too will be reported. The
bottom line is to pay your invoices on time or before they are due and you
will get a higher Paydex Score. You can drive your score up by using your
tradelines each month and paying your invoices immediately.
Business Checking Account Balances
If you plan to seek business loans and lines of credit your account balance
matters. In order to be in a good position for applying for loans, your
average daily balance should be at least $10,000 for the prior 3 months.
Your business bank account acts as a measure of how your business
manages cash flow. Banks want to be sure your business can consistently
handle debt and expenses. Non Sufficient Fund (NSF) charges are a big
red flag. Avoid them at all costs.
Business Credit Cards and Loans
Now that you have been building a Paydex score of 80 or above based on
your payment history, it’s time to start applying for major credit cards,
business loans and even lines of credit. Most banks and credit card
companies require you to be in business for two or more years; however,
you have a built a relationship with your banker, you can some times get
around this requirement. Visit your bank and let them know you wish to
open a credit card or line of credit based upon your excellent Paydex
scores. See where they stand on extending credit without personal
guarantees. If your business bank account is in good standing and shows
steady growth you may be able to obtain credit without personal
guarantees.
Secured Business Credit Cards and Loans
Your bank may be unwilling to extend credit without a personal guarantee if
you have been in business less than two years. In this case, get a secured
business credit card or business loan without a personal guarantee. Aim for
repayment terms of 6 months or less. You do not want to set-up a long term
business loan while attempting to build business credit. Pay the loan
obligation in its entirety before the end of the loan term. For instance, if you
set up a 6 month repayment terms, pay off the loan in 5 months. The bank
will report your payments to Dun & Bradstreet and it will not show it as a
secured loan. Once the bank begins to report your business credit history
to D&B, other business credit providers will see how much you borrowed
and will more than likely give you comparable amounts of credit. Once you
pay off the loan, wait a few weeks and request another loan for a higher
amount and pay that one off early also.
Several credit card companies will extend secured business credit cards.
These credit cards will not report as secured. The good thing about
secured cards is that you determine your credit limit. Whatever the amount
you have to secure the credit card will be your limit. It will report to your
D&B file as a business credit card, not a secured business credit. Make
sure you pay in full each month to build your Paydex score. Wait a couple
of months, after your credit payment history has been reported, to apply for
another secured business credit card.
Establish a Good Credit Mix
As with personal credit, you need to create a good mix of credit for your
business. In order to build a good business credit profile you should have
a mix of active business tradelines (5 or 6), several business credit cards
and at least two small business loans which have been paid in full.
Business Lines of Credit
Your company has taken all the necessary steps to build a good business
credit rating. You are between the 18th month to 2 year mark and it is time
to apply for a business line of credit. Begin with the banking institution
where you received your business loans. Hopefully by now you have an
inside track to your bank’s business loan officer. Apply for a business line
of credit solely upon your excellent business credit rating. Remember to
keep at least $10,000 in your business checking account at all times. It
shows the bank you have a good cash flow and can manage your debts
well. You don’t necessarily have to use the line of credit once you are
approved; however, it’s always good to have as an emergency fund.
Tips for Building a D&B Profile
Dun & Bradstreet may contact you to verify information or ask for further
information. Preparation is vital when speaking with or contacting Dun &
Bradstreet. Make sure you have covered all your bases. What you say to a
Dun & Bradstreet representative goes permanently into your file and is very
difficult to retract.
Dun & Bradstreet may contact you to verify information or ask for further
information. Preparation is vital when speaking with or contacting Dun &
Bradstreet. Make sure you have covered all your bases. What you say to a
Dun & Bradstreet representative goes permanently into your file and is very
difficult to retract.
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10 Steps to Building Business Credit
Building business credit can be accomplished regardless of your personal credit
history.
Micro Business Loans
Do you need just a little cash to grow your business try a microloan from the SBA.
Bad Credit Business Loans
The funding sources may be limited for business loans when you have bad credit
but they are existent.
Business Loan Sources
A little Creativity and al lot of determination can get you the money you need.
Building business credit can be accomplished regardless of your personal credit
history.
Micro Business Loans
Do you need just a little cash to grow your business try a microloan from the SBA.
Bad Credit Business Loans
The funding sources may be limited for business loans when you have bad credit
but they are existent.
Business Loan Sources
A little Creativity and al lot of determination can get you the money you need.
More Resources
|
Now it is time to put
your efforts toward
establishing a positive
credit profile with Dun
& Bradstreet. Dun &
Bradstreet is the
largest tracker of
business credit and
maintains a vast
database of business
credit reports.
Experian, Equifax and
Credit.net also provide
business credit reports.
your efforts toward
establishing a positive
credit profile with Dun
& Bradstreet. Dun &
Bradstreet is the
largest tracker of
business credit and
maintains a vast
database of business
credit reports.
Experian, Equifax and
Credit.net also provide
business credit reports.
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