Tonight, I finally got around to applying for a D.U.N.S. number, a unique nine digit identification number, for each physical location of your business. The D.U.N.S. (Data Universal Number System) number is linked to your business’s credit profile. Requesting the number is free will start a credit profile on your business. It is also required by the Government if you want to do business with them.
More than likely, someone will be calling me up tomorrow and asking me pointed questions about my corporate finances, what my company does, etc., all for the 9 digit code. You can opt not to disclose financial data.
Next, they will probably try to sell me the outrageously expensive get-your-credit-established “Credit Builder” package. I’ve been through the drill before — The fee for the program will change from the $700 range to the $200 range and everywhere in-between. $399 was the soft spot where it settled last time I went through the process. The truth is that you don’t need it; companies report automatically, and soon you will have a credit score.
The first goal for a small business is simply to establish a Paydex score, which ranges from 0 to a high of 100. More specifically, my goal is 80, which equates roughly to a personal FICO score of 700+. In general 5 companies are required to report to get a Paydex score.
Building Corporate Credit
The basic advise espoused on building business credit is the same as with building a personal credit score – find someone willing to extend you credit (establish trade lines), and pay your bills on time. Finding companies to report is fairly simple. Start with the basic office supply companies like staples, office max, and office depot. They give easy credit to just about anyone and report. Wait roughly 45 days for these companies to report.
Next, move up to the Home Depot, Lowes, and Dell level. Again, wait the requisite 45-60 days for all these companies to report before moving up to the next level: general use credit cards. Of course, getting a general use, regular credit card is much harder. Many credit companies look at both your personal and business credit scores, although some may only need to glance at your business scores to get an approval.
TIP: A DUNS number will normally be given to you in 30 days after registration. However, if you are a perspective government contractor, vendor, or grant applicant, you will receive it in one day. Some “credit councilors” charge for this quick turn around. Don’t fall for it. Just click on the government contractor button and get the DUNS number in one day.