A Dun & Bradstreet rating is a business credit score that can affect your ability to borrow money. Lenders, suppliers, customers and insurance companies frequently purchase D&B reports on businesses. Here’s how it works, and how to get one.
Many small business owners have heard they should get a Dun & Bradstreet rating, but not everyone knows what it is or how it can be useful.
If you’re not familiar, the D&B rating is a business credit score. Business credit scores help lenders assess if you are likely to pay back what you borrow and how much credit to give you.
There are three other major credit bureaus – Experian, Equifax and TransUnion – that track businesses. Generally, if your business is in good financial health, it’s advantageous to be tracked by all of the major credit bureaus, including D&B.
What if you’re not getting tracked? Look for opportunities to borrow from lenders or establish trade credit with companies that report for D&B.
See related: How long does it take to build business credit?
Why you need a D&B rating
A D&B rating can affect your ability to borrow money. Lenders, suppliers, customers and insurance companies frequently purchase D&B reports on businesses, so your D&B rating could affect your access to loans, favorable terms from suppliers and your ability to negotiate better payment terms.
What is a good D&B rating?
D&B gives a business both a rating classification and a composite credit appraisal.
The rating classification, which you will only get if you have supplied D&B with a current financial statement, tells lenders about your business’s size. A rating classification may go from HH, for a business with a net worth of under $5,000, to 5A, for a business with a net worth of $50 million or more.
If your business is growing, you may soon find yourself in a rating classification that includes larger businesses, but there isn’t a lot you can do to move the needle on this quickly.
The composite credit appraisal gives your business a number from 1 to 4 based on its creditworthiness. The score is based on your payment history, financial information, public records, years in operation and other factors.
The most creditworthy businesses are assigned a 1. The highest score you can get if you don’t submit financial information on your business to D&B is a 2, so, if you think a lender is going to use your D&B report to evaluate a loan application, it could be worthwhile to submit a financial statement to D&B.
This is a part of your credit score you can influence most quickly. Paying your bills on time is the best way. Checking public records to make sure that they don’t include wrong information that could adversely affect your credit score may also help.
See related: 6 ways to maintain a good business credit score
How much does a D&B rating cost?
You can get some information on your credit score for 14 days for free from D&B using CreditSignal. After that, you must upgrade to a paid plan to keep getting information, and to receive additional information from your file that is not included under CreditSignal.
D&B’s CreditMonitor reports, which allow you to bench mark against other firms in your industry, cost $39 a month.
Not all small businesses need to monitor their credit report constantly, but if you are applying for major funding, it could come in handy to know where you stand.