Agave Mountain

Today I received a letter from Dun and Bradstreet, alerting me that activity has been noted on my business credit profile.  The "activity" was that my business had an incomplete credit profile.  I rolled my eyes as I tossed the letter into the trash can. 

I don't think it was an accident I got an email pitching the "free" 30-day trial of their self-monitoring service ($449 per year), followed by a letter than inferred that I have negative information on my profile that needed to be corrected.  I think it is a carefully engineered sales process designed to hook gullible business owners into forking over cash for a useless service. 

Confused about the perceived negative, you pick up the phone and a commissioned sales reps crows, "that's why you NEED self monitoring for your business.. it's free for 30 days..." 

Apparently, these tactics are wildly successful in extracting cash out of confused business owners.  In most cases, when I see blog or forum postings about D&B it will go something like: "I'm not sure what it does, but I forked over $600 for their service."  I am surprised that otherwise sane and rational business people pay for a service they are supposed to get for free.  Amazing.

I guess it isn't surprising because most of the Google-indexed articles on business credit are either generated by nefarious credit repair agencies, or link bait for advertising.

D&B Practices

You should know that D&B support is comprised of commissioned sales representatives.  Not surprisingly, the sales representatives can spin a yarn or two in pursuit of a rent check.  So far they have outright lied to me on several occasions.  One went so far as to tell me that I wouldn't be able to purchase a computer at DELL without a PAYDEX score.  Another told me that the government wouldn't do business with me unless I paid for verification.  Absurd.

Last year, I got a cold call from a D&B representative telling me that there was some negative activity on my credit profile.  He launched into a credit builder sells pitch.  I cut him off and asked which trade line had reported negative information, because I pay my bills on time as a receive them.  He continue to try to sell me a variety of products.  After some pointed questions he finally admitted that the negative information was that I didn't have a PAYDEX score.

Amazingly, in spite of never purchasing a D&B product (and not having a PAYDEX score) I have had no problem getting 3 business credit cards, an OfficeMax corporate card, and approval for a bank loan.  Go figure. 

So lets dispel some myths about D&B:

• FREE D-U-N-S™ Number. You CAN get a DUNS number for free.  The process will take 30 days, or you can pay for expedited processing -- $49 for 5 days.  If you are applying for government grants, you can get a free DUNS number within 24 or 48 hours.  This will open up a profile which will be "inactive."  Once a creditor reports it will be activated.
• When you choose to have your DUNS number created for free, you will be contacted by D&B in order to convince you to pay for  your profile.  Don't.  Most likely, you will be outright lied to-- something like you won't have an active profile unless you pay for the $399 credit builder package.  This is simply not true.
• If the rep states (as the did to me) that the government will not do business with you unless you have an active credit profile and tells you that you must purchase the credit builder service... this is not true.  You do not need to purchase any services from D&B to do business with the government. The government only requires a DUNS number.
• If you talk to D&B, you will be told that the DUNS number is a non-rated identification, that cannot be used to build corporate credit.  You will be told that if you want a rated number, you must go through the validation process (Credit Builder or Credit Builder Plus) at a cost anywhere between $300 and $800.  This is simply not true.  Simply give the DUNS number to your trade references and reporting organizations, and your credit profile will automatically get "activated" for free.  Further, you will become rated and get a free PAYDEX score when you have enough reporting trade references.
• You might be told that a free DUNS number is not a complete registration and isn't eligible for predictive credit scores or credit ratings.  Not true, it will just take a little longer. 
• The credit builder service -- they simply take your information and ask you for trade references.  That is all.  If you are a new business and don't have trade credit yet, you will be paying $399 for your own credit report.  On the flip side, you get to write whatever you want into your credit profile.

Do you need Dun and Bradstreet?  No.  Register for the free DUNS number and submit that information to the creditors as you apply for trade credit.

Labels: Business, Small Business Scams, Startup

Posted by Joe Turner on Saturday, August 30, 2008 at 10:48 AM | Permalink