Help! I’ve Got a D-U-N-S® Number, Now What?
Like many business owners, the retail store owner I recently met with is attempting to wean herself off of using personal credit to fund her enterprise. To that point, she has begun the process of creating business credit. She said, "I have a D-U-N-S Number, but I'm not sure what it means. How should I proceed?
One of the first steps in the process to create credit is obtaining a free D-U-N-S Number. It serves as a company's unique identifier in the Dun & Bradstreet commercial credit database, and it must be given to your company in order to establish a business credit profile there. D-U-N-S Numbers may also be needed in order to establish business credit, apply for government grants or contracts, or transact business with other companies.
Establishing credit references that will show up on your credit report with Dun & Bradstreet and other commercial credit reporting agencies is the next, and arguably most important, stage in the process of obtaining business credit. The most essential aspect affecting business credit ratings is payment history, and without any accounts reporting, it is challenging for a credit bureau to compute a business credit score. In fact, Dun & Bradstreet states that a firm needs at least two companies reporting at least three credit experiences on its Dun & Bradstreet credit report in order to produce a Paydex Score—one of the company's most well-known credit scores.
How do you get those accounts?
One choice is to obtain a small company credit card that reports to Dun & Bradstreet as well as other important business credit agencies like Equifax, Experian, and the SBFE. Qualifying shouldn't be too difficult if you have solid personal credit and enough money from all sources. The credit cards for small businesses that report to business credit are described in this FREE BUSINESS CREDIT COURSE.
You aren't necessarily out of luck if you don't currently meet the requirements for a company credit card.
Many firms that sell supplies also make it relatively simple to set up an account "on terms" so that you can order the materials and pay for them later. The most typical contract has "net-30" terms, which require payment to be made within 30 days of the invoice date. These suppliers provide a wide range of items, from furniture and equipment to shipping and office supplies, that businesses frequently need. They probably won't even verify the owner's credit personally. Although the initial credit limit may be low, once you demonstrate that you are a trustworthy customer who makes on-time payments, you might have it increased. These vendors all submit information to business credit.
Entrepreneurs frequently ask me about adding existing accounts to their business credit reports. Previously, that process was somewhat time-consuming because the lender or vendor had to establish an account with the business credit bureaus in order to report customer information on a regular basis.
A service called eCredable Business Lift also assists small businesses in having information about bills they already pay added to their business credit reports, such as cell phone, power, and internet bills. eCredable Lift will verify qualifying bills and report them to multiple business credit agencies for a monthly fee. They also report the monthly subscription fee as a tradeline to the major commercial credit bureaus.
Once you have a number of accounts on your business credit report, the next step is to ensure that you pay on time. When calculating business credit scores, payment history is once again the most important factor. You don't want to be so preoccupied with running your business that you forget to pay a bill; this can set you back quickly in your efforts to transition away from personal credit.
Entrepreneurs are frequently pleasantly surprised at how quickly their business credit can improve from "no credit score" to "good credit score" simply by opening a few accounts that report and paying them on time. It takes some time to get started, but your company will benefit in the long run. Find the Best Commercial Credit Here.
