What is a D&B Report?
A D&B Report, also known as Dun & Bradstreet Business Credit Report, is a business credit report issued by the business credit reporting agency Dun & Bradstreet. The Dun & Bradstreet Business Credit Report measures the creditworthiness of a company.
Why is a Dun & Bradstreet Business Credit Report important?
Dun & Bradstreet Business Credit Reports are used by vendors and creditors to assess the financial stability, as well as reliability, of a business.
D&B Business Credit Reports are used to help determine financing terms or interest rates. If a business does not have a D&B business credit report, it would be difficult to negotiate favorable terms or gain approval.
D&B Reports are available to anyone for purchase, so monitoring your D&B business credit report for accuracy is crucial. Any business negotiating terms, seeking out SBA loans or financing, signing leases, bidding on contracts, investing, and more, should be regularly monitoring their D&B business credit report.
How do I get a D&B report?
Any business can get a D&B report. Use the Dun & Bradstreet DUNS lookup to see if your company is already assigned a DUNS number. If you do not see your company listed, you can apply for a DUNS number.
Who can access a business’s D&B Business Credit Report?
Either the company itself or a creditor is able to generate a D&B Business Credit Report. Once a D&B credit report is generated and a company is assigned a DUNS number, anyone can purchase access to the business’s D&B credit report, including vendors, lenders, partners, or even competitors.
What is available on a Dun & Bradstreet Business Credit Report?
A Dun & Bradstreet Business Credit Report has many different parts to it, including company and industry information. Some data is provided by the company, while other data is taken from public record, vendor, creditor, and lender payment history, and collection agencies.
Aside from the 7 D&B scores, also included in a D&B Report is:
- General company information
- History of the business
- Business registration information
- Government activity summary
- Company operational data
- Industry data
- Three years of financial statements
- Public filings, including liens, judgements and UCC filings
What are the scores shown on my Dun & Bradstreet Business Credit Report?
There are 7 different scores calculated through Dun & Bradstreet alone, which is by far the largest business credit reporting agency.
PAYDEX score
The Paydex Score is a business credit score that evaluates a company’s payment patterns with vendors, lenders, and creditors. It ranges from 1 to 100 with the higher number reflecting the lowest risk of paying beyond terms. Most businesses have a Paydex Score between 30 and an 80. A high Paydex Score indicates excellent payment history and other factors. We rarely see anything above an 80 Paydex. 80 likely means all payments are on time. Above 80 would mean payments are made before due dates. Anything below 80 would indicate varying degrees of slow payments. There are businesses that are unscored. This would be due to not having enough tradelines/vendors. The score can be impacted more by larger dollar amount vendors.
Delinquency Predictor
The Delinquency Predictor is an assessment tool to evaluate credit risk. It is designed to predict the likelihood that a company will pay its bills in a severely delinquent manner (90 days or more past terms), obtain legal relief from creditors, or cease operations without paying all creditors in full over the next 12 months. The DP is a ranking that does a comparison of businesses within the DNB global database. It has 3 different components that can reflect a company risk ranking.
- A “Score” of 101 – 670, where 101 represents businesses that have the highest risk of severe delinquency, and 670 represents businesses with the lowest risk of severe delinquency. This score provides a direct relationship between the score and the level of risk.
- A “Percentile” of 1 – 100, where 1 reflects businesses that have the highest chance of severe delinquency, and 100 reflects businesses with the lowest probability of delinquency. This Percentile shows where a company falls compared to all businesses in the Dun & Bradstreet Data Cloud, it allows customers to manage or order their portfolios from highest to lowest risk of severe delinquency.
- A “Class” of 1 – 5, this class divides five distinct risk groups where a one (1) represents businesses that have the lowest potential for severe delinquency, and a five (5) represents businesses with the highest potential for severe delinquency. Having a class ranking allows customers the ability to quickly segment their new and existing accounts into varied risk groups to determine the best course of action moving forward.
Financial Stress
The Financial Stress Score was designed to help decision-makers predict the likelihood that a business will require legal relief from creditors or cease operations without paying all creditors in full over the next 12 months. Financial Stress is made up of 3 risk classifications. It uses a Score, Risk Class, and a percentile ranking. The score ranges from 1,001- 1,875. The higher the score the lower the risk. The Risk Class ranges from 1-5. 5 being the highest chance of financial stress. The Percentile ranges from 1-100. 100 represents companies with the lowest risk financial stress. The Financial Stress tool does a comparison on about 27 million active U.S. businesses including payment, public filing, demographic, and financial information, if available.
Supplier Evaluation Risk Rating (SER Rating)
The Dun & Bradstreet Supplier Evaluation Risk (SER) rating measures the level of risk associated with a particular supplier or business. It is used by vendors, lenders, or partners to determine if a supplier is more or less likely to cease business operations, file for bankruptcy, or become inactive over a 12-month period. This rating tool is used to assess and manage risk associated with potential and existing suppliers and partners or any businesses applying for financing or credit of any kind.
The SER is a numerical score that ranges from 1-9, with 1 representing the lowest risk and 9 being the highest risk number. D&B uses a statistical and predictive approach to evaluate data and assess a supplier’s likelihood of failure with the resources to compare suppliers on a national scale. By studying large numbers of companies and assessing characteristics that are likely to lead to negative outcomes for a business the SER then predicts its rating. Included in the rating are Financial Stability, Operational Performance, Payment Behavior, Industry Market and Conditions, Corporate Linkages, and Public Records.
When using this score, businesses can proactively identify high risk suppliers and act accordingly to protect the level of exposure they have by continuing the same terms. If appropriate they can then diversify supply sources or negotiate better terms. If it is a new supplier/partner they can reject or offer different terms to cover possible risk.
For industries with strict regulatory requirements such as healthcare, finance, and defense the SER can help meet due diligence and regulatory standards.
Credit Limit Recommendation
Listed as a dollar amount on reports, the intention of the credit limit recommendation is to help creditors/lenders make credit decisions. The amount is based on “historical analysis of credit demand of customers in D&B’s U.S. payments database which have a similar profile to yours.” (D&B)
Dun & Bradstreet Rating (D&B Rating)
D&B Ratings are generated with company information such as size, industry and financials (if available).
D&B Viability Rating
the D&B Viability Rating is a performance rating that predicts the likelihood a business will go out of business, cease operations, or file for bankruptcy over the next 12 months.
How do I positively impact my D&B Credit Report?
Each credit bureau has their own way of gathering and evaluating data on businesses. However, there are a few things to observe when improving your business’s credit health in a D&B business credit report. Making payments on time is arguably the most important factor for your business credit score, so paying on time or even early is a great way to begin positively impacting your Dun and Bradstreet rating. Building strong relationships with lenders and suppliers is also beneficial, as they are the ones sharing data with the bureaus and can share data to Dun & Bradstreet on your behalf. This positive feedback can improve the business credit score shown in your D&B credit report. Other things to look at include making sure public records are up to date and accurate, actively monitoring changes to your business credit score.
How do I repair my D&B Credit Report?
The best way to repair your D&B credit report is to work with a business credit repair specialist. Repairing your business credit on your own can be time-consuming, and could potentially do more harm than good.