What is a DUNS Number Used For?
A critical part of building business credit is first establishing a strong credit history.
And to establish a business credit history, you need to have your company recognized and verified by a reputable credit bureau like Dun & Bradstreet.
Once your business or sole proprietorship has been deemed as a unique legal entity, you’ll receive what’s called a DUNS number.
What is a DUNS Number?
In Dun & Bradstreet’s own words, it’s “short for Data Universal Numbering System and is a nine-digit unique identifier for businesses. A DUNS Number is assigned through their patented identity resolution process and identifies a company as being unique from any other in the Dun & Bradstreet Data Cloud.”
Simply put, it’s a way for Dun & Bradstreet to identify businesses as unique legal entities that are separate from other companies.
It’s also used by banks, lenders, government agencies, and other financial institutions to track transactions and monitor general activity.
Note that a DUNS Number is one of the most common business identifiers in the world, and the Dun Bradstreet database (DB D) currently maintains DUNS Numbers for over 500 million companies.
What is a DUNS Number Used For?
A DUNS Number serves four main purposes.
First, it provides a high level of standardization for the identification, tracking, and monitoring of businesses. By assigning each company a unique number, it’s easy to generate an accurate business credit file that allows for streamlined assessment and comparison.
Second, it’s used heavily for business credit reporting. As you accumulate a payment history, for instance, this is reported to the DUNS database, which is a significant contributor to your business credit score.
Third, it’s frequently used for determining eligibility when borrowing from a lender or financial institution.
If, for example, you wanted to get business tradelines from a potential supplier, they could simply look up your DUNS Number to quickly check your trustworthiness and stability to determine your “fundability.”
In fact, many lenders prefer prospective borrowers to have a DUNS Number to aid in the processing of loan and credit requests.
Finally, you can use a DUNS Number to learn about a company you’re considering partnering with. Through a quick check, you can see their credit history, credit score, and if they have any lawsuits or liens against them to better manage your risk and make smarter decisions.
And with the DUNS database being continually updated, it always provides an up-to-date overview that’s perfectly suited for today’s fast-paced business world.
Benefits of Having a DUNS Number
For starters, it’s a simple way to make your business more credible and trustworthy. By getting verified and recognized in the Dun & Bradstreet database as an official business entity, this can be helpful for establishing a small business and vetting your company to potential partners.
In fact, having a DUNS Number is required for doing business with many other companies and government agencies. If you apply for federal grants, for instance, part of the grant application process may require providing a DUNS Number.
Next, the information in your credit file can be instrumental in helping you qualify for business financing such as a business loan, credit card, government grant, government contractor financing, trade credit, and more.
Similar to how a bank looks at personal credit for determining eligibility for a credit card, lenders can objectively access data through your DUNS Number to easily determine your risk level.
As long as you have a positive track record as a business owner, this can increase your chances of being approved.
By the way, if you’re looking for business credit vendors, here’s a comprehensive list of tier 1 business credit vendors and tier 2 business credit vendors.
You can also check the DUNS Number of potential business partners and potential customers to determine whether or not you want to work with them.
The inherent transparency that’s provided by a DUNS Number helps you mitigate risk and improves your odds of partnering with quality professionals.
How Do You Apply for a DUNS Number?
First, you’ll want to make sure you don’t already have a DUNS Number in the DUNS database, which can be done by using the DUNS Number lookup tool.
Assuming you don’t already have one, visit this link from Dun & Bradstreet to apply.
This involves four steps where you first specify what type of business you have (e.g. a US-based business, Canada-based business, etc.)
Next, you’ll fill out some basic information like the legal name of your business, address, phone number, legal structure, and number of employees.
Once you’ve done that, you’ll be asked whether you want to expedite your DUNS Number request.
Normally, it takes up to 30 days for a request to be processed. But if you expedite the process for a $229 fee, you should have your DUNS Number within eight business days.
If you would prefer to expedite your request, you can find information on how to do that here.
The fourth and final step is to simply wait until your information has been authenticated. When this happens, you’ll receive your DUNS Number via email.
Note that you may be contacted by a Dun & Bradstreet representative at some point to confirm information.
Difference Between a DUNS Number and EIN
Both a DUNS number and EIN have nine digits and are used for business identification purposes.
But that’s where the similarities end.
In terms of differences, a DUNS Number is issued by Dun & Bradstreet, while an EIN is issued by the Internal Revenue Service.
The purpose of a DUNS Number is to track business activities and transactions, whereas the purpose of an EIN is to identify companies for tax purposes, such as tax reporting, paying taxes, and tax returns.
A DUNS Number offers global coverage, while an EIN is strictly limited to businesses operating in the US.
Also, a DUNS Number never changes over time, while an EIN can change.
And finally, a DUNS Number can play a huge role in building business credit. For example, as your payment history on a business credit card or with tradelines grows, it will be reported to the DUNS database, which can positively impact your business credit report.
While having an EIN can help you obtain financing, as it’s often necessary for applying for funding, it doesn’t directly affect your business credit score the same way a DUNS Number does.
Note that a DUNS Number is also different from a 12-digit unique entity ID that comes from The System for Award Management — otherwise known as SAM registration which is administered by The General Services Administration.
How Much Does a DUNS Number Cost?
Nothing. You can get a DUNS Number from Dun & Bradstreet for free.
However, if you choose to expedite your DUNS Number request, there is a charge of $229.
If you’re not in a hurry and don’t mind waiting up to 30 days, you won’t have to pay anything.
How Long Does it Take to Get a DUNS Number?
If you choose normal processing, which is free, it takes up to 30 days to receive a DUNS Number.
But if you opt to expedite the request, it will only take a maximum of eight business days.
Does a DUNS Number Expire?
No, a DUNS Number never expires and is never reused.
Once you’ve been assigned a DUNS Number, it will remain with your company indefinitely.
“Once assigned it will not be re-issued or re-assigned,” explains Dun & Bradstreet. “The DUNS Number stays with a business throughout the duration of its life cycle, including name and address changes, changes in corporate structure, and even bankruptcy.”
Is a DUNS Number the Same as an EIN?
No, it’s not the same as an Employee Identification Number.
Although they both have nine digits, similar to a Social Security number, an EIN is federal government issued, while a DUNS Number comes from Dun & Bradstreet.
A DUNS Number never changes once issued, while an EIN can change.
Also, a DUNS Number can be assigned globally to businesses all around the world including the United Nations, while an EIN is exclusively US-based.