We’re going to cover everything there is about business credit with Dun and Bradstreet. I’ve been getting many emails asking me what exactly it is that you need to achieve business credit? What’s the difference between that and personal credit? We’re going to detail the stuff that you will need to keep in mind or at least have handy to apply for business credit.
First and foremost, you will need to maintain a good credit score. A good personal credit score. Why is that? Because when you’re new and trying to establish business credit, people still need to put a face behind it. The creditors will process your business application, but they still need to see who will be the personal guarantor for this business.
When you’re getting started and building your business credit, you’re going to need to pay attention to your personal credit one way or the other. Then you’re going to need something called the EIN, which is basically like the social security ID that’s going to be attached to your business. Just like you have a personal social security number that they attach to your business credit, the same thing is with the EIN that will go attached to your business.
Last but not least, you’re going to need the D&B or the Dun & Bradstreet number, and I’m going to do a demo and show you how you can achieve all of that. I’m going to share a little bit about the letters that I’ve been receiving when I first applied for business credit so you can tell what it is that the creditors are looking for. Each creditor is different.
Some do not care about your credit once you have established a history with them. Some of them will be the first thing they’re going to look into. Some of them do not care, and they go straight to your EIN or your D&B.
This is a copy of a letter that I had received sometime last year when I first got my LLC and got my first EIN. As you can see, I blocked some of the information out for identity protection purposes. I wanted to share the layout of what a letter from the creditors looks like. This was a rejection letter because I didn’t have any business credit history or anything like that.
I thought that it was a good thing to save one of these letters, so when I start building my business credit and get solid business credit, I would look back into this letter and say, “Oh, you remember those days.” It turns out this letter came in handy today when I decided to record a video to show you all about business credit.
As you can see here, this is a scan. You’re going to get the reference ID up here up top and then the name of the company, your address, and dear company such and so, we regret this, we regret that. I wanted you guys to focus on the most here, where it says our decision was based on the whole or in part of the following credit reporting agency. You have TransUnion, Experian, and Dun & Bradstreet.
They looked into TransUnion and Experian because even though you are a business, they still need to put a guarantor behind it. A guarantor means a person responsible for the debt, a person who will make payments for the debt, and that’s typically required for the new businesses. Let’s say you don’t have any business credit built over the past couple of months or even years. The first thing they’re going to go ahead and look into is can this person be a responsible business owner?
Let’s look into his or her credit and see how he or she behaves. That was my case. I don’t want to wait. As soon as I got my EIN, I went ahead and applied. I figure the worst thing they’re going to do is to say no. Then this, when I came across Dun & Bradstreet, that’s when I was like, “Oh, I remember back in my corporate jobs.” I remember that some of my bosses talked about getting a Dun & Bradstreet report because sometimes, they will bring in other companies to do some work for them.
One of the important things they typically check was this company solvent? Is this company healthy? How do we know that if we pay them, you will not run away with our money because they just happened to be bankrupt, and they’re just robbing people left and right? They always talked about Dun & Bradstreet or D&B. I never actually had to worry about anything like that. My job was to review that they had a healthy D&B credit versus now trying to apply for some of it.
I’ll go into detail about Dun & Bradstreet in a little bit, but I wanted to finish going through this letter first so you can all see what a typical letter from the creditors looks like when you’re applying for business credit.
In the next paragraph, you’re going to see that they talk about the Fair Credit Reporting Act. They’re saying here that whatever your decision is, it was unbiased. It was based on facts. However, you still have the right to get a free copy of your report from the reporting agency, meaning these three.
If you request an order no later than 60 days after receiving this letter, they are required to give you a free copy. If you get one of those rejection letters when you’re starting to build your credit, you want to understand what you need to build on. They give you some reasons here, but they take a general term in my experience. They just put it up here and say, “Oh, these are the type of reasons why we reject borrowers or people who are trying to apply for credit in your category.
It’s not a good reason per se for you to understand, “Oh, here’s where I need to work on now.” What you need to do is reach out to them and request a copy within 60 days after you get this letter and analyze that report and look into the details and say, “This is what I need to work on. I haven’t been in business long enough. You know what, let me wait a couple of months and apply for the next credit card.”
That’s what I did. I waited six months, and then I went, and I applied for an American Express card. After six months, I got approved because I built my business credit for six months. I let my EIN, my LCC season for six months. Each state, each bank, each creditor is different. I’m trying to say here that I do not give up if they say no the first time.
Whatever, go on with your life and then wait another couple of months and apply again, and then if they say no, then wait a couple of months also, and they use until you finally get a yes, and that’s what I did.
Next, let’s move on to the next paragraph. They tell you actually what type of report they look into. In this case, they said your credit score was, and they will give you a credit score run on this date whatever, and the name of the report is the TransUnion FICO 09 classic score, which varies from 300 to 850. When I read this the first time, I was like, “What is it? I don’t understand. I thought there was only one type of TransUnion score.”
They were referring to a FICO score nine classic. Once you get the link, you can review the report at your discretion, but if you scroll down, they talk about the different types of scores. They talk about the vantage score, which is the one that Credit Karma uses. You can access this link, and take a look at this report, learn a little bit about the different types of vantage score.
We’re going to go straight into the report that they were talking which was the classic 9. We will hit the section where they call the FICO risk scores. You’re going to see the report right here. This is the report that they use. It’s based on 13 scorecards. It was developed back in 2011, 2013, and these are the ranges that they follow and how far they go back into.
They look into delinquencies that have been over 90 days within the past 24 months. Whatever stays in your credit for the last two years or 24 months is going to be reflected in this score. That’s what it means and the range. I’m pretty sure you guys know 300 for the lowest, 850 for the highest, and so on. It looks like most of these are within 24 months, but I’m guessing maybe some other reports can go a little longer than that.
They talk about 12 months here. Take a look at this report at your discretion. It’s very informative. Now we’re going to go to the exciting part, which is how to obtain a D&B credit. Now we’re on the D&B website. This is where you guys will come and request your Dun & Bradstreet number or your D&B number. I’m going to provide you with the links. You have three different categories. This is the one I use. I didn’t find the need to pay for any of the services because I was getting started.
As you start growing more and more, you will probably want to pay for some of the pay services that Dun & Bradstreet offers because they give you not just a number. Still, they start showing you the credit file, credit signal, like their credit monitoring services. If you’d want to go one step above, you have the full credit file, credit signal.
I believe these prices are yearly. If you come to think of it, it’s not so bad because you are getting the peace of mind, you are monitoring your business credit, and you are staying on top of it so you know what you need to work on, what is it that you’re lagging on and you can start working on how to improve that.
We’re going to come to the free section on the demo. They say it can take up to 30 business days to get the number. To me, it took less than a week. It was so fast, it was ridiculous. I’m going to go ahead and hit on get started, get a DUNS number. I’m going to put NYC Business, and then the year that it began, 2018, because that’s when I opened up my business. The number of employees I’m going to put down is two because it was my boyfriend and me.
Annual sales, I’m just going to make some numbers up, for now, $46,000 a year. Business description, you do real estate. Company website, www.nycbusiness.com, whatever your website is. Business telephone number 888-888-8888. Business email, [email protected]. Your structure, here’s where you’re going to select you’re a sole proprietorship, or you’re a partnership or a corporation, which includes a limited liability company.
If you don’t know what these structures are or what they mean, you can learn a little bit about it. What I’m going to do I will provide you with the link so you can learn all about sole proprietorships, partnerships, and corporations.
For this exercise, we’re going to select a corporation. The principal name must be the company’s highest-ranking officer, meaning the founder’s president. In this case, that will be you.
Now on the top title, you go ahead and select your title. Let’s say you’re the CEO of the company. For a corporation, if any shareholders are part of it. If you have your wife or your husband or maybe another business partner, then you just put it in there. In this case, let’s say you have a partner that will be NYC Business Partner, put the name, and then how much of ownership. Let’s say you went in half and half, so you went in 50-50.
If you have someone else, you go ahead and click on add an officer or shareholder, and where your location is, 123 Main Street. Let’s say in the city. We’re going to put New York. State, we’re going to select New York. 11111, United States. If you have any social media accounts, you fill those in. If you want any partner offers, yes, I would like to be contacted by LegalZoom if you’re going to work with their LegalZoom team or any ADP services, etcetera. In this case, we’re just going to go next to the next page.
Dun & Bradstreet account registration. You need to create an account. Let’s say you are an applicant. Last name two. Email, nycbusiness@gmail. You go ahead, get the picture, create your password, confirm your password, agree to the products you hit submit. What’s going to happen is that immediately, you’re going to get an email in your inbox telling you that they already received your application and that you will be receiving the D&B number soon so you can start enjoying the benefits of having a D&B number.
RESOURCES & LINKS MENTIONED IN THIS EPISODE:
-TransUnion Report https://www.transunion.com/docs/financialServices/FS_ScoresOverview.pdf
-How to get a Dun and Bradstreet (D&B number) https://www.dnb.com/duns-number/get-a-duns-number-product.html
-Personal vs. Business credit https://www.novariseinvest.com/business-credit-vs-personal-credit/
-Legal Entities https://www.novariseinvest.com/llc-for-real-estate/
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