Everything you need to know to get a DUNS Number – and Why You Want One

A Data Universal Numbering System (DUNS) number is the equivalent of a Social Security Number that reveals details about a business’ track record gathered by Dun & Bradstreet credit bureau. Created, copyrighted and issued by Dun & Bradstreet, it is secured upon successful recognition of a business. A DUNS number has become the standard measure to establish and validate a business’s credibility globally.

Before getting involved, businesses as well as vendors and suppliers like to do a background check of a potential partner’s credit profile. This is in order to get an insight into the potential partner’s financial standing and business identity, so as to make an informed decision about a collaboration.

Who is Dun & Bradstreet?

Formerly known as the Mercantile Agency, Dun & Bradstreet was founded by Lewis Tappan, to aid merchants in proving their creditworthiness. Being one of the oldest companies in the USA, D&B today handles 265 million businesses globally, out of which over 100 million businesses have successfully been verified with and allocated a DUNS number. Further, the federal government made getting a DUNS number its primary criteria for business identification in 1994.

DUNS number vs. EIN

Unlike an Employer Identification Number (EIN) issued for federal tax identification, a DUNS number, while also being a nine-digit number providing business identification, is sought for purposes of reporting business credit and establishing creditworthiness.

  • EIN is temporary and can change overtime, whereas a DUNS number is unique in identifying a business and stays consistent.
  • A given business can be affiliated with multiple EINs; a DUNS number, on the other hand, is reflective of a one-on-one relationship with an enterprise.
  • The verification process to get a DUNS number is more extensive and thorough, and the number is issued only after Dun & Bradstreet confirms an enterprise’s existence through multiple streams.
  • Unlike an EIN, a DUNS number is required by all kinds of businesses.
  • While an EIN is US specific, a DUNS number offers global coverage.

Reasons to get a DUNS number

Establish your business profile: Just like a FICO score is essential to establish a consumer’s creditworthiness, similarly, businesses also require a credit score to qualify for financing of products by vendors and sellers. The credit score that Dun & Bradstreet generates after a credit check is known as a PAYDEX score. It is based on Dun & Bradstreet’s assessment of the applicant company’s payment history over the course of a year, i.e., whether payments were made when due, typically requiring at least three transactions with two tradelines (suppliers/vendors) to qualify.

Dun & Bradstreet accordingly assigns a number from the range of 1-100 to rate payment performance, with 100 representing a timely payment clearance record. The faster a payment was made complying with the terms of sale, the higher the score. A score of 80 implies that payments were made on time; however, to score higher up to 100 requires not just paying according to the terms but paying earlier, i.e., a month in advance consistently. Therefore, the only way to improve a business’ PAYDEX score is to make prompt payments earlier than required.

Vendors and suppliers look up a business’ PAYDEX score before deciding trading terms, with a better score earning generous terms that offer more time to pay the money back, thus allowing a business to better manage and streamline the flow of capital as well as having security during emergencies. A no PAYDEX score looks just as suspicious as a low PAYDEX score. Getting a DUNS number first is a prerequisite to apply for and generate a PAYDEX score.

Protect personal credit: Not having a DUNS number implies you rely on your personal credit to conduct your business. This can sabotage your credit score in case of delayed payments or debts.

Easy affiliation with the government: Applying for a DUNS number is needed for any contractual opportunities with the government at any level (local, state, national). In addition, a registration in the System for Award Management (SAM) is required to conduct business with and service any government agency. The government does not accept any applications without it. Further, registrations require periodic renewals each year. Registered small-scale enterprises, in every industry, are subsequently offered contracts each year by the federal government once their registration has been approved. A SAM application takes about five working days to be processed and up to 25 working days to be approved. The yearly renewal can be applied for three months post its expiration. Since a government contract would be a stable source of revenue with a guaranteed payment for services, a DUNS number would prove indispensable for the growth, diversification and networking of a business.

Secure longer-term contracts with suppliers: Lenders will be more likely to offer lucrative trade terms like net 30 and net 90 accounts where products can be purchased on credit and be paid for after a month or more when a business demonstrates its creditworthiness. A PAYDEX score of 75 and higher is required to secure these trading terms.

How does a business apply for a DUNS number?

Before applying for a DUNS number, ensure that a number has not already been created and issued by Dun & Bradstreet. If a number has not already been issued, fill out a form, and after its submission wait for a representative from Dun & Bradstreet to get in touch to assist you with the process. Your number will be sent in a month’s time. If you want to avail a faster service, a payment of $229 through DUNSFILE service will generate the number in less than a week. While the process to apply for a DUNS number is fairly simple, it is expected of the applicant enterprise that it is an established legal entity and recognized as an LLC (Limited Liability Company) or corporation (S-Corp or C-Corp) by the state it’s founded or operational in. The application requires information such as the legal name of the business and the owner, address and headquarters of the business (whether it is home or office-based), contact details, and the number of employees.

Manufacturers, suppliers, and other businesses can all benefit from getting a DUNS number. The more businesses learn to optimize business financing through a DUNS number, business credit cards, tradelines, and reporting to business credit bureaus, the better results they will see in terms of growth and income.

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