Every money lender will use Dun & Bradstreet to assess
you and your business before granting you a loan. How you handle your personal
and business finances will determine what rating or credit score you will
receive. This rating will determine your loan requirements; How much you can
borrow, the amount of interest you will need to pay, repayment time and what
you can use the loan for.
Keeping your finances in check will give you a higher credit
rating and open more reasonable and favorable loan terms as you have been
assessed as low risk in not paying the loan back.
Firstly, ask yourself:
- Do I have a Dun & Bradstreet credit rating?
- Is my Dun & Bradstreet credit rating good enough?
- How can I improve my Dun & Bradstreet credit rating?
Types of Dun & Bradstreet Ratings
In addition to the Dun and Bradstreet credit report, the
company has a wider range of insights to help lenders better understand a
business’s payment history and financial strength.
Here are the main Dun & Bradstreet ratings and risk
analysis reports:
D&B PAYDEX
The D&B PAYDEX is Dun & Bradstreet’s most popular
credit reporting product. Your company’s PAYDEX number indicates your record of
paying bills on time, including invoices, credit cards, and loans, among other
key financial indicators. PAYDEX scores range from 0 to 100, with 100 being the
best score possible.
D&B Failure Score
A company’s D&B Failure Score helps creditors determine
if a business is likely to file for bankruptcy or other legal relief from
creditors within 12 months. This Failure Score is known as a dynamic risk
indicator. It tracks your company’s ongoing activities to determine any
potential risk that indicates your company might not pay back its loan.
D&B Viability Rating
D&B Viability Ratings use various data to rate
businesses’ future viability. The exact ways Dun & Bradstreet, Viability
Rating scores are tallied is proprietary. Still, the company says it uses
“predictive and descriptive” components to determine the chance a company will
go out of business, become inactive, or pursue bankruptcy within a year.
D&B Delinquency Predictor Score
The D&B Delinquency Predictor Score offers insight into
the potential for a company to be severely delinquent with payments, cease
operations without paying creditors, or seek out bankruptcy within 12 months.
Dun & Bradstreet qualifies delinquency as being one with 10% of the dollar
amount of past-due bills.
Legal Events
D&B also offers tools to help companies see if their business is the subject of any upcoming bankruptcies, lawsuits, liens, judgments, or public legal filings. According to the company’s website, analysts fact-check each post made to your company’s business report, which can help keep erroneous information from reaching your D&B reporting.
What Impacts my Business D&B Rating?
Generally, the biggest factors that impact your company’s
D&B rating are your current debts, long-overdue bills, and any pending legal
matters concerning your business. Other public information might also play a
role.
Your D&B rating also depends on which of your vendors or
creditors report back to Dun & Bradstreet. Not all businesses share
information with the company.
Dun & Bradstreet Rating System
Dun & Bradstreet’s credit rating is similar to personal
credit scores. Every person is assigned a score based on their financial
history and current credit. Late payments, underutilized credit, or too much
debt can negatively impact your credit rating.
Dun & Bradstreet Rating Classification
To create a numeric value, Dun & Bradstreet the information it gains from your business’s financial history and credit.
Here are the numeric values:
PAYDEX Score: 0-100 (worst to best)
D&B Failure Score: 1-5 (worst to best)
Viability Rating: This report uses four ratings
- Viability scores range from 1-5 (worst to best)
- Portfolio Comparison scores range from 1-9 (worst to best)
- Data Depth Indicator ranges from A-M
- Company Profile uses a scale of A-Z.
Delinquency Predictor Score: 1-5
Dun & Bradstreet Composite Credit Appraisal
Dun & Bradstreet also provides a Composite Credit
Appraisal. This appraisal is based on the company’s analysis of crucial
financial data, company payments, public records, a business’ age, and other
relevant details. This information is distilled into a 1-4 scale, with 2 being
the highest number a business can get without supplying Dun & Bradstreet
with its current financials.
How are Dun & Bradstreet Ratings Generated?
Dun & Bradstreet typically base their ratings on
information companies relay about a business’s credit and repayment history.
Dun & Bradstreet also uses other information from the public domain and
undisclosed sources.
You’re encouraged to register for a data universal numbering
system (or D-U-N-S). A D-U-N-S provides your business with a distinct identity.
This number exists alongside your employee identification number, or EIN, which
the Internal Revenue Service assigns. Registering for a D-U-N-S number helps boost
your score, as it confirms you are who you claim to be.
How to Obtain a Dun & Bradstreet Credit Rating
Creditors can access information about your business’s Dun
& Bradstreet ratings, even if you haven’t opened an account with D&B.
However, if you wish to know about changes to your business credit scores and rating,
you must apply for a D-U-N-S number. Once you receive this number, you should
sign up with D&B’s CreditSignal service. Both these services are free.
You can monitor your business credit profile via the
CreditSignal program. However, you won’t be permitted to access reports through
this portal. To monitor your business’s D&B Rating, you will need to sign
up for a credit-monitoring plan (from $149 per month).
How to Improve Your Dun & Bradstreet Rating
To improve your Dun & Bradstreet rating for your
business, you can register an account for your business: this will boost your
score because you’re helping the agency verify the information on file.
Moreover, you can audit your company’s own experience with
credit. In addition, lenders usually consider criteria known as the “five Cs of credit.” You can work to improve your business’s five Cs.
Here are the five Cs of credit outlined:
- Character: Your business reputation for repaying debts
- Capacity: Your business’ ability to repay a loan
- Capital: The number of liquid assets your business has
- Collateral: What (and how much) you can offer to secure a
business loan
- Conditions: Details about how long a business has been in
operation, company financial statements, owners’ credit history, etc.
Dun & Bradstreet Rating: The Bottom Line
The key to a strong Dun & Bradstreet rating is good
credit. You can sign up for an account and take an active role by monitoring
your business credit, but ultimately the work lies in building or improving
your business’s credit history.
Remember that there are options if you’ve seen your Dun
& Bradstreet rating and aren’t sure you’ll get approved for a loan. Some
lenders are willing to work with businesses that don’t have excellent credit.
Credibly is a suitable option for many applicants.
