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  • Joy Greenwood

Understanding Business Credit Inquiries


Most small business owners view business credit inquiries in the same terms as personal credit inquiries, but — in reality — that couldn't be further from the truth! While there are certain circumstances where having your D&B report pulled could count against your company, its important for business owners to understand inquiries and what they mean to your scores and ratings.

Credit inquiries are a normal part of doing business. Any active and functioning business is going to have them. Whether you are placing an order online, setting up a new account, applying for new credit cards, requesting approval for a new credit line, or increasing one you already have, trade-based inquiries send a signal to D&B that your business is open, operating, and buying products or services. In most cases, this also tells D&B that your company is placing orders, growing, and thriving.

But if you go months or years without generating any new interest (inquiries) that usually tells D&B that your business has gone dormant (or was never really active in the first place) and that can be especially harmful if a long period of dormancy is suddenly interrupted by a rash of the wrong types of inquiries — finance-based inquiries — which can signal your company is undergoing financial distress.

FOUR TYPES OF INQUIRIES AND WHAT THEY INDICATE

(Examples provided)

TRADE-BASED INQUIRIES are those relating to a specific industry, such as:

Restaurants: food purveyors, kitchen equipment companies, dish/utensil providers

Auto repair: auto parts houses, tools, equipment, fluids, solvents, uniforms

Construction: lumber yards, dumpster rental, landscapers, roofers, warehousing

Transportation: fuel accounts, auto parts, GPS-tech, mechanics, tires

Few: You opened a new account or made a purchase

Moderate: You are trying out some new suppliers

Increased: You are growing or expanding your operations

VENDOR-BASED INQUIRIES are those relating to general purchases made any business, such as:

Printed materials: business cards, signs, menus, flyers, brochures, invitations

Office equipment/supplies: computers, printers, paper, ink, desks, chairs

Marketing materials: advertising, design services, sign rental, subscription services

Business services: accounting software, lawyers, security services, insurance

Few: You opened a new account or purchased from a new supplier

Moderate: You are testing new suppliers in preparation for changes

Increased: You are making seasonal purchases or expanding operations

DATA-BASED INQUIRIES are those seeking to verify your business data, such as:

Government: verification of specific details required for federal contracting

Identity: verification of address, phone, and principal information

Contract: verification of specific scores or ratings required to qualify

Few: You recently changed your address or bid on a contract

Moderate: You recently changed your address or expanded operations

Increased: Changes are occurring within your business or organization

FINANCE-BASED INQUIRIES are those that result in credit/debt responsibility, such as:

Finance: banks, credit cards, leasing companies, long- or short-term lenders

Insurance: business, liability, fire, marine, casualty, life, health, factoring

Real estate: rental or management agencies, holding companies, maintenance services

Few: You opened a new account, applied for credit, or are moving operations

Moderate: You are checking rates, changing locations, or expanding operations

Increased: Impending changes, increasing debt, or facing financial distress

While none of the above indicators are cut into stone, D&B's algorithms typically accept infrequent inquiries in any of these classifications as "normal business operations" that are expected from any small business. However, sudden or higher than normal activity can send those same algorithms into complete disarray, so you should be aware of what happens the moment you press the APPLY button.

UNLIKE PERSONAL CREDIT INQUIRIES...

  • There is no limit on who, how often, or under what circumstances someone can pull your company's business credit report.

  • Commercial credit reporting agencies are not required to tell you the name of the company that pulled your business credit report, only the industry assigned to their company.

  • Tracking inquiries generated when new accounts are opened or applications are submitted can be a valuable indicator as to whether your supplier or creditor will report your payment history.

  • Your permission is not required. Any person, company, agency, or organization can pull your business credit report at any time without your knowledge or authorization.

  • Inquiries typically stay on the D&B report for up to two years, but they only impact scores and ratings for a maximum of one year.

  • Inquiries cannot be removed from your D&B file for any reason.

  • Inquiries do not tend to impact the scores and ratings unless they are excessive in number (indicating possible fraud) or are associated to specific finance-based industries.

  • A lack of inquiries does not indicate financial strength, but just the opposite — that your business is no longer active and functioning.

For further information about inquiries on your D&B business credit report, feel free to reach out to me directly with your questions by calling 800-918-7505 (ext 2) or clicking to initiate a CHAT online.


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Starpoint Credit Solutions LLC is not affiliated with Dun & Bradstreet®, however we recommend their products to our clients to assist in the creditbuilding and monitoring process.
Starpoint Credit Solutions LLC
11504 Joy Street   |   Austin, TX 78748
Phone / Fax  (800) 918-7505
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