Have you ever heard about a DUNS number? Or Dun and Bradstreet? I remember months ago I didn’t even know they existed. When we create a business there are some terms that we may hear but are not familiar with. Some of those terms include LLC, Division of Corporations, C-corps, Sole proprietorship, S-corps, business bank account, business credit card, FEIN and Net 30, 60, 90. If you don’t know what these things are, it's okay, I will explain them below. After the following explanation of the above mentioned terms, I will explain what a DUNS number is all about.
LLC- LLC stands for Limited Liability Company. A Limited Liability Company is a business structure that protects the owner from debt and liability of the business. For example, if someone sues company ABC, LLC, the owner of ABC LLC’s personal assets are protected. Assets would include something like their house or personal bank accounts.
Division of Corporations- This is the office where those interested in doing business in a state file their Articles of Organization or Incorporation to officially register their business.
C-Corp- C- Corp or “Corporations” are businesses that are taxed under subchapter C under the Internal Revenue Service (IRS) code and are seen as its own tax paying entity.
Sole Proprietor- Sole Proprietor is an entrepreneur or proprietorship that has no legal distinction between the company and the owner. For example, Mary has a business, and she is doing business under her own name as Mary’s wines.
S Corps- S-Corps Are corporations that file taxes through their shareholders and they are more than likely not subject to double taxation.
Business Bank accounts- Are… business bank accounts 😊. There are different types of bank accounts to choose from that can vary from bank to bank. For example, most banks offer personal bank accounts separately from business bank accounts. Business bank accounts often require more paperwork to open. Here are some top recommendations for free business bank accounts from NerdWallet.
Business Credit Card- Business credit cards vary and not all business credit cards report on your business credit report, some may report on your personal credit report. I will have a separate blog post about this topic in the future. Essentially business credit cards have a lot of perks that reward the card owner for using the cards through points, miles, or cash back.
FEIN- FEIN stands for Federal Employment Identification Number. This is the number that the IRS uses to identify a business. This is the number used on various tax documents and is needed to open your business bank account.
Net 30, 60, 90 – Are payment terms that reference your payment history by paying your trade reference account off in full by 30 days, 60 days, or 90 days. Entrepreneurs and business owners use these accounts to have a history of positive payments reported on their Dun and Bradstreet account.
Now that some essential terms are out of the way, let’s get into this DUNS number information.
Dun and Bradstreet is a company that offers business operation reports. Think of it like a Credit Karma account for your business. A lot of companies use this company to review a business’s business score. The business score of a Dun and Bradstreet account shows how you have handled paying down business debt. Also, that score includes the information of the different companies that your business has worked with. The Data Universal Numbering System (DUNS) shows the scores of businesses all around the world. When entrepreneurs and businesses are seeking business funding, the lender can use their DUNS number to look up their business score to determine the business’s eligibility for the loan.
If you are new to starting a business you might be used to using your social security number and your personal credit report to apply for various types of credit, but when you create a business your FEIN and DUNS number act as you SSN. Your DUNS number and associated business report are going to be what you use to check that everything reported on your business report is correct and accurate. If you find information that is not supposed to be on your business report you can dispute the information and have it removed, just like on a personal credit report.
I have heard stories that some who started a business and only filed for a FEIN number weren’t able to get the funding they needed for their business because their business wasn’t on the DUNS network that lenders use to see how they have been managing their debt. This is why having a DUNS number is important.
Here is another thing to consider. When I first started my business, I had a basic understanding of what I had to do. I registered my business with the Division of Corporations in the state that I live in, completed all of the forms required, and set up the various accounts I needed to hit the ground running. When I was setting up my business bank account, I began to ask questions about business funding and if the business credit cards would be reported to Dun and Bradstreet. The banker I spoke with told me that the bank didn’t report to Dun and Bradstreet and only reported to the credit bureaus. I said all that to say that even though a DUNS number can be an asset to your business, not all lenders use the Dun and Bradstreet system, so make sure you research what reporting bureau your lender prefers before you apply.
Also, some credit cards market themselves as business credit cards but do not report to your business account on Dun and Bradstreet. These types of business credit cards report on your personal credit history and if you carry a balance on the card that can bring your personal credit score down. Again, to keep business and personal accounts separate, ask the bank you want a business credit card with if they report to Dun and Bradstreet.
I hope that this post was helpful to those who may not have heard about a DUNS number or Dun and Bradstreet. I am happy that I was able to learn about Dun and Bradstreet early on in my business journey. Have you heard about a DUNS number? Comment down below and share how you found out about a DUNS number. If this post can help someone else, please feel free to share. Also please subscribe!