You may have heard the term D-U-N-S number (also known as DUNS number or D&B D-U-N-S Number) and wondered whether your business needs one. Here we’ll explain the importance of a DUNS number for your business.
What Is a DUNS Number?
A DUNS number is a unique nine-digit identifier for a business created by credit bureau Dun & Bradstreet. The Data Universal Numbering System — or DUNS number — was created and copyrighted in 1962 by Dun & Bradstreet. Dun & Bradstreet is one of the three major business credit bureaus. DUNS numbers have become the standard numbering system to identify business entities across the globe.
Just as your social security number reveals a lot about you, like your bank account, tax returns, credit score, residences, etc., your DUNS number and business credit scores reveal similar information about your business. Your DUNS number is linked to you PAYDEX credit score, which is Dun & Bradstreet’s own credit scoring system for businesses. The PAYDEX score ranges between 0 and 100 and is based on suppliers’ reports of your payment history as a business. This information is used to determine how likely you are to pay back loans or other business debts on time.
How Can a D-U-N-S Number Help Me?
Here are three ways a DUNS number can help you:
- Establish business creditworthiness. Your DUNS number is directly tied to the credit profile D&B builds on your business. In fact, to even have a D&B PAYDEX score (you can check yours with Nav), you’ll need a DUNS number. When vendors or suppliers look up your business credit profile because they are considering doing business with you and offering your business trade credit, they’ll want to see a credit history. The same is true with a lender or bank who is considering lending to your business through small business loans, business credit cards, or other financing. Keep in mind that your credit profile won’t be of much use to you (and can actually harm you) until you begin establishing a strong business credit history.
- Safeguard your personal creditworthiness. When you don’t have a DUNS number tied to your business credit profile, you’ll need to depend more on your personal credit for business purposes. This can harm your personal credit if you make late payments or keep high amounts of business debt.
- Get longer terms with your suppliers. If you can prove to vendors and suppliers that you are a creditworthy business, they will be more likely to offer you longer trade terms, like net-30 or even net-90 day terms. The best way to do this is by establishing business credit history tied to your DUNS number.
Who Is Dun & Bradstreet?
Your DUNS number only reveals credit information gathered by one credit bureau: Dun & Bradstreet. Originally known as the Mercantile Agency, Dun & Bradstreet is one of America’s oldest companies. Its founder, Lewis Tappan, created it in 1841 for the purpose of helping merchants establish the creditworthiness of potential customers.
Today, Dun & Bradstreet keeps track of over 265 million businesses worldwide. Over 100 million of those businesses have been assigned a DUNS number. The federal government adopted the DUNS identification number as its principal business identifier in 1994.
In 1998, the DUNS number was incorporated as the U.S. government’s contractor identification code. This means that companies without a DUNS number cannot do business with the federal government. This makes a DUNS number invaluable for many small businesses, since government contracts are often stable, lucrative sources of income. They also use the DUNS number to determine your eligibility for federal grant money.
Is a DUNS Number the Same as a Federal Tax ID Number?
A DUNS number is different from your federal tax ID number, called your employer identification number (EIN). A DUNS number is used for business credit reporting purposes, whereas an EIN is issued by the IRS and used for tax identification purposes. An EIN is like a social security number for your business, and is included on any tax documents. You may also be required to provide your EIN number for business purposes, like opening a business bank account.
How Do I Look Up My DUNS Number?
Before you apply for a DUNS number, check to see if your business already has one. If you are a Nav customer, you can do this via the BusinessLauncher tool in your profile. You can also check at the D&B D-U-N-S Number Lookup. Here, you’ll be connected to a lookup tool that search for your business using either your company name and address, or your company’s telephone number.
How to get a DUNS number
Apply here to get a DUNS number. Once you’ve applied, you’ll likely get a call from a D&B representative to help you through the process, and you’ll receive your DUNS number within 30 days. For quicker service, you can use DUNSFile to get it in less than five business days, but it will cost you $229.
Applying for a DUNS number is a simple process, but it does require you to first establish your business as a legal entity (LLC, C-Corp, S-Corp, etc) with your state. Inside the application, you’ll need to provide information like your legal name and those of any other business owners, your business name, the name of your business’s headquarters and address of your business, your telephone number, whether you’re a home-based business, and the number of employees at your physical location.
If you want your number fast, you can use the DUNSFile service to get it in less than five business days, but it will cost you $229.
The more you learn about business financing—including the importance of business credit cards and business tradelines and how reporting to the business credit bureaus is a key factor to the growth of your company—the more your DUNS number will work in your favor.