What is the D&B® Rating?
Business credit scores can help third parties, including lenders and suppliers, better understand the financial health of a company. The D&B Rating is an important component of your business’s D&B® business credit profile – a collection of scores and ratings which potential partners may review in order to help manage risk. Tweet This There are two parts to the D&B Rating – the Rating Classification and the Composite Credit Appraisal.
The Rating Classification is a combination of numbers and letters that reflect a business’s size based on worth or equity. It is only assigned if a business has supplied Dun & Bradstreet with a current financial statement. At the upper-end of the spectrum, a 5A rating represents a business with a net worth of $50 million or more. Companies with a net worth under $5,000 – the minimum for this classification – are labeled HH. You can review the full Rating Classification chart for more details.
The Composite Credit Appraisal is a number ranging from 1-4 that indicates a company’s overall creditworthiness, with 1 representing the most creditworthy businesses. This number is based on information routinely collected by Dun & Bradstreet, including payment histories, financial information, public records, years in operation, and other factors. Note that 2 is the highest score attainable for a company that doesn’t submit financial details to Dun & Bradstreet.
We’ve put together the infographic below to help business owners better understand their company’s D&B Rating.
Why Did My D&B Rating Change?
If you were recently notified of a change to your D&B Rating, you may have questions about what prompted the move. There are several reasons the rating may have improved or worsened, including:
- The submission of revised financial information
- A change in the timeliness of your payments to suppliers
- An increase in borrowing
- Concerns about contingencies from lawsuits
How Can a Change in My D&B Rating Affect the Business?
Anyone can purchase your company’s business credit profile, including potential lenders, suppliers, customers, or insurance companies. Consequently, changes to your D&B Rating may affect:
- Your business’s ability to borrow money
- The favorability of terms from suppliers
- Your leverage in negotiating better payment terms
How Can I Impact My Business’s D&B Rating?
Making it a point to always pay your bills on time (or early) can go a long way toward impacting your business’s D&B Rating. Certain aspects, such as the overall net worth of the company, are not as easy to change. However, business owners should consider:
- Working with lenders that report payments to Dun & Bradstreet
- Submitting your company’s financial information directly to Dun & Bradstreet
- Routinely checking public records for inaccuracies
- Using CreditSignal® to receive free alerts when your business’s credit scores and ratings change*
What Else Should I Know About Business Credit?
Customers, suppliers, lenders and other important business partners have an interest in managing risk. Many turn to Dun & Bradstreet’s business credit reports in order to gain insight as part of their partner investigations. Building and maintaining business credit should be a priority for any company that wants to access capital, increase customers, and expand its operations. Consult our Business Credit Guide to learn more about helping establish your business’s credibility.