Getting Your D&B Report Into Shape

A company’s Dun and Bradstreet (D&B) credit report is often the first place a business partner will look to find out a company’s credit history. What’s contained in the report will often be used to determine if a company is allowed to purchase goods and services on credit, and if so, what the terms of that credit will be.

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To explore some of the important issues related to D&B credit reports, we talked to Amber Colley of the D & B Credibility Corp. One issue which came up in the beginning of our call was the difference between D & B Credibility Corp, and Dun & Bradstreet, which are not the same company. Dun & Bradstreet is a credit bureau which writes credit reports and provides a company with a PAYDEX score.

D & B Credibility Corp enables small businesses to improve their Dun & Bradstreet credit report through a variety services, such including more company information in the report, adding trade references, and monitoring changes to their credit. When a company adds trade references, they place the order with D & B Credibility Corp, but the actual verification of trade references is conducted by Dun and Bradstreet.

The following answers are based on notes from my interview with Amber Colley, but are not her actual words.

Why is improving one’s Dun & Bradstreet credit report important?

Most businesses are not aware that their D & B Credit Report is frequently being pulled by business partners. Unlike a consumer credit report, there is no permission required to pull a company’s credit report.

Credit reports get pulled for a variety of purposes, ranging from determining whether or not to extend trade credit to a company, to deciding if a company would be a reliable partner. For example, a good Dun & Bradstreet report could be very important for helping a small product maker get into a major chain store. The chain store will want to know if the product maker can “handle” a large order. D & B reports are used for this purchase.

What should a small business do that is looking to improve its credit?

First, a business should get a unique D-U-N-S number. You can get a D&B D-U-N-S number for free directly from Dun & Bradstreet Credibility Corp or Dun & Bradstreet, however, the process can take up to 30 days. D & B Credibility Corp also offers an expedited paid service to establish a duns number within 5 days.

Once you have a D-U-N-S number, you should make sure the information on the company is correct, and fill out the company’s profile as much as possible. It’s important to provide information including company officers, revenues, employee size, number of years in business as well as business start date. This type of information can all be added for free using Dun & Bradstreet Credibility Corp’s Company Update portal. Through this portal you can also dispute inaccuracies, add financial statements and review public filings for free.

You can also sign up for Dun & Bradstreet Credibility Corp’s free Credit Signal product. Credit Signal allows you free access to changes in your D&B credit scores and ratings as well as notifications of inquiries into your credit file. Being notified of these changes can allow you to anticipate possible partner and lender reactions to changes in your business credit file. As well as knowing whether your business credit scores have been affected by your business activities.

Once you have established a D&B Duns number, and updated your business credit report, the next step is adding trade references. Companies may be dealing with suppliers that already report to Dun & Bradstreet, enabling them to have a PAYDEX score. If you don’t, or only have a few suppliers which are reporting into D & B already, having a few companies report their trade experiences with you can make a significant difference. You want to choose companies which you have paid in a timely manner and that extend you the greatest amount of credit. A trade reference from a company which extends $10,000 worth of credit is better than one from a company which provides $1,000. Adding trade references from companies which don’t already report requires paying a fee. The purpose of adding additional trade references to your business credit report is to demonstrate the amount of business your company can support and pay back in a timely manner.

What is a PAYDEX score?

PAYDEX is proprietary to Dun & Bradstreet, and is a unique, dollar weighted indicator of a business’s historical payment performance based on the total number of payment experiences in D&B’s file. The D&B PAYDEX ranges from 1 to 100, with higher scores indicating better payment performance. A PAYDEX score over 80 means that the company pays ahead of when payment is due. A score of 80 is on time. A score of 60 would mean that a company pays its bills 22 days after the payment due date. However, a score of 60 would not necessarily indicate that a company is a late payer relative to it peers. Some industries are very slow to pay invoices. Dun & Bradstreet also provides information about industry averages, and benchmarking relative to the industry. This information enables potential creditors to see if the behavior of company is in line with industry practices.