One of the most popular credit reports for businesses is the Dun & Bradstreet report. Dun and Bradstreet (D&B) is a credit reporting agency that collections private and public information to produce a credit profile. Dun & Bradstreet provides PAYDEX business credit scores as well. Your D&B business credit report shows your company information including operational data and public filings such as liens and bankruptcies. Lenders look at this information to determine how you are. Keep reading to find out more about your D&B rating and how it affects your business.
The Dun & Bradstreet Rating provides an overview of the financial standing and creditworthiness of your business. There are two parts to the D&B rating: a rating classification and the composite credit appraisal.
Rating classification: this uses a combination of numbers and letters to rank the company’s size based on equity or net worth. This can range from HH (less than $4,999) all the way up to 5A (over $50 million), or 1R to 2R when the rating is based on the size of the company. It is only assigned if you have supplied D&B with a current financial statement.
Composite credit appraisal: this measures how credit worth your business is on a scale of 1 to 4. The lower the number is the better. This score is based on the payment history of the company, years in business, public records, the number of employees, and financial information.
These two measures help determine your business’s creditworthiness based on company size and financial resources.
D&B produces its ratings, scores, and reports based on the payment histories reported by creditors and the information a company submits to the firm. They use statistical analysis, industry standards comparisons, demographics, and other data to make projections about the business performance.
D&B Ratings matter because other companies may be looking at it to see decide if they should do business with your company or not. The information in the credit reports can make the difference between closing a deal or not.
The D&B report is best for the following situations:
Like with other credit bureaus, there are both advantages and disadvantages to the D&B Report.
There are a few reasons why your rating could change or fluctuate such as:
Stay on top of your credit file and if you see any inaccuracies report them immediately. Also, work with lenders that report to the credit bureaus and always pay your invoices on time.
The Bottom Line
The Dun & Bradstreet report uses information collected from numerous sources to create a business credit report. The report will benefit owners who want to establish business credit and get approved for loans.