A solid credit rating from Dun & Bradstreet is like a Good Housekeeping seal of approval for your business. In many cases, companies will choose whether or not to do business with you based on this rating alone.

What is Dun & Bradstreet? It's the world's largest credit bureau, maintaining a huge database with information on more than 100 million businesses across the globe, including 38 million in the United States. Companies of all sizes rely on D&B to provide the information they need to build profitable relationships with their customers, suppliers and partners.

How does D&B determine your credit rating? It looks at a number of factors, including how prompt you are in paying suppliers, repaying loans, and meeting monthly financial obligations. Along with payment history, strong consideration is also given to cash flow, the financial resources of your company, working capital, and net worth. It also considers additional data like corporate finance reports, business filings, lawsuits, and judgments against your company. D&B also relies on self-reported data, including direct investigations and interviews with company principals and other businesses that you work with.

Three other companies -- Credit.net, Equifax, and Experian -- also provide business credit reports, but D&B remains the dominant force in the industry. Your business's creditworthiness is ultimately determined by what are known as the four C's of credit: capacity (what is your ability to repay the loan?), character (will you repay the loan?), capital (what are you worth?), and conditions (how do external factors impact your business?).

A key step toward building excellent credit is to establish a rating with D&B. First you need to apply for a D-U-N-S (Data Universal Numbering System) number from D&B. Your D-U-N-S number is free, and you can apply online. This will begin the process of establishing your business credit record. The application process is pretty straightforward and you should receive your number in 30 to 45 days.

Before you apply, however, make sure you have opened at least one trade account with the companies listed in Step 2 that are part of the D&B credit network (Dell, FedEx/Kinkos, Fry's, Home Depot, Lowes, Uline, Staples, UPS).

When you receive your D-U-N-S number, call your first trade account and ask to have the number added to your credit file. Your credit history with that vendor will be automatically reported to your D&B credit file each month, under your D-U-N-S number.

Develop a plan to open a new trade account each month with a vendor in the D&B network, after your previous month's credit activity has been reported. Using the free eUpdate service offered by D&B, you can check what's on your credit report.

Your goal should be to have five active trade accounts in good standing at the end of six months. Because all businesses do not report to D&B, your first five accounts must be part of the D&B network. Most major companies that extend credit to startups report to D&B. But, before you open an account, call the credit department and ask.

D&B rates and reports your business credit as a Paydex score. While personal FICO scores range typically between 500 and 800, with scores over 720 being very good, business Paydex scores range between 0 and 100, with scores over 80 considered the best.

Businesses that pay accounts before invoices are generated receive high scores for their payment history. To drive your Paydex score up rapidly, you need to use five accounts every month and, immediately after purchasing, send a check to the company to pay for your purchase. You do get rewarded for paying early.

Once you have a business credit rating, be sure to review your credit profile at least once or twice a year. Make sure your profile has the most accurate information, and that no errors appear on the report. If you do find errors, you need to contact D&B and report the errors immediately. And always have paperwork ready to support your argument.

A good credit rating from D&B is essential to the smooth operation of any business. You'll go far by keeping one eye on your balance sheet and the other on maintaining a good business credit rating.

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Content provided by D&B, the leading provider of business information for credit, marketing, and purchasing decisions worldwide.