OH, THOSE NINE LITTLE NUMBERS!
At some point back in time, some so-called credit guru recommended business owners put their EIN number or DUNS® number in the slot where the social security number is supposed to go when applying for credit.
Little could he have known what absolute havoc he was going to wreak far into the future for those who were innocent (or desperate) enough to follow his advice about those nine little numbers.
As you can see below, when the dashes are removed, all three (EIN, SSN, and DUNS) are just nine little numbers:
An EIN number has nine numbers separated by one dash: 00-0000000
A DUNS® has nine numbers separated by two dashes: 00-000-0000
A Social Security number has nine numbers and two dashes: 000-00-0000
Online applications don’t require the dashes, so they all become: 000000000
Right there is where the similarity ends, though. Their use and intent is vastly different, and they are NOT INTERCHANGEABLE in any way! More importantly, if you are trying to use one set of nine numbers where the computer is expecting to see a different set, you may be in for a wild ride!
The crazy guru’s scheme probably actually worked (at least for a while) until computer technology caught up and began to truly decipher those numbers for what they were supposed to be. But most creditors and suppliers now require everyone to provide their social security number on credit applications — and not because they want to — but because they have to.
1. They are required to verify and track your identity (due to the Patriot Act). 2. They need to verify YOU are requesting the credit account (and you're not the victim of identity theft). 3. They have to prove you meet the credit underwriter’s base criteria (such as a 500+ FICO score). 4. They want to get you approved any way they can, even if that approval is based off your personal credit (if the business does not have sufficient credit in its file).
What that old guru and his 873,642 blind followers didn’t take into consideration is that no computer system can distinguish the intention behind the nine numbers you type into their system. If the slot says SSN and you type in an EIN, the computer doesn’t assume you are smart enough to know what your own SSN number is. It accepts the nine digits as your SSN, just like it did for the other 99,802 applications it processed in the past hour. It has no ability to “think” or “believe” you just used your EIN number as your SSN.
If you input an EIN number in the SSN slot, the computer is going to check the personal credit scores for THAT NUMBER, believing it is your social security number. In many cases, this will throw up fraud alerts on that individual’s personal credit file, even though that was clearly not what you had intended to happen. In the past, being lucky enough to have an EIN that matched the SSN of someone who had awesome credit may have worked for you, but not anymore. Today’s search engines are going to identify that EIN as a back-end search of someone else’s SSN and decline your application (and possibly throw in some fraud alerts).
The same goes for the DUNS® number. If the space provided is asking for your DUNS and you put in your EIN number, the computer will check the Dun & Bradstreet business credit report of the company that belongs to that number, even though it is not a match to your business name. All kinds of bells and whistles will go off in D&B’s system, possibly throwing both companies into an investigative status until the matter is resolved.
Remember, putting any other set of numbers in the slot they were intended for could open you up to being investigated for fraud or identity theft, especially if the EIN number you used has been confused for someone else’s social security number. No matter what any guru, sales rep, consultant, or agent might have told you, you need to input the correct information so your credit approvals are based upon you and your business.
I understand people are reluctant to provide their SSN because they think they will have to personally guarantee the credit, but that’s not necessarily so. As I mentioned above, most creditors are forced to gather a principal’s social security number in order to be in compliance with the Patriot Act, especially if they are a publicly-traded company or if they receive or provide federally-backed funds. That doesn’t mean they are going to require a personal guaranty.
While some creditors may phrase language that asks if the applicant is “willing to provide a personal guarantee”, a “willingness” does not translate to a “requirement”. Requesting your social security number does not mean they are requiring a personal guarantee, just that they are tracking responsibility for the credit line and the debt. In most cases, if there is no specific mention of “requiring” a personal guarantee, one will not be required.
No matter what you may have been told elsewhere, it is crucial that you put your social security number in the social security number spot, and your EIN number in the EIN spot, and your DUNS® number in the DUNS® spot. If you do not want your social security number associated to your business credit in any way, too late, it already is. Your SSN is also linked to the bank accounts and credit cards you are using to process your income and pay your bills.
There are ways to get around having to provide your social security number when applying for certain types of credit, but you will likely need to call in to complete your application since most creditors who offer online applications will have the SSN as a mandatory field. When you phone in your application, an agent may be able to provide a manual workaround, but if the application is linked to a major bank or credit card carrier, the SSN of a responsible party is going to be required to meet federal standards.
Times have changed. The world is a different place now. That’s not to say you can’t still get credit that is based upon your company’s own merit, it just means you may have to be willing to stand up for your business when it needs you. After all, most creditors and lenders will tell you — if you are not willing to stand behind your business, why should they?
LESSON: The best way to get approved for business credit that is not personally guaranteed is for your business credit report to prove your company's merit, creditworthiness, and viability. By showing strong data about your business and consistent prompt payment history, your corporate credit report will do the talking for you.