Fortune quotes FML partner Karlene Barry in article on business credit

By Karlene Barry, CPA, Partner, Tax Services
Dec 07, 2023

An individual’s credit score is a reflection of how responsible they’ve been when borrowing money from lenders. Businesses have credit scores too. I was quoted in this article for Fortune about companies using credit that reports to business credit bureaus.

Dun & Bradstreet, the subject of this particular article, is one of the three major business credit bureaus along with Experian and Equifax. Below are the excerpts where I was quoted.

A Data Universal Numbering System (D-U-N-S) number is not used for tax purposes, but is instead a number that other businesses can use to determine your company’s financial wellbeing. If you want a business credit score generated by Dun & Bradstreet, you’ll need one.

For example, if you’re asking for a loan from another company, they’ll likely run your D-U-N-S number to decide if you’re a suitable candidate. “Dun & Bradstreet tends to give the lender a little more security,” states CPA Karlene Barry. “Your [business] credit is based on your payment history–and they also look at whether other lending entities are comfortable with you. What do you have for collateral?”

Any business can apply for a D-U-N-S number through the Dun & Bradstreet website–it’s totally free.

I was also quoted on the importance of keeping your personal and business lines of credit separate.

In 2022, a whopping 40% of employer firms applied for either loans, lines of credit, or cash advances. Of those businesses, 65% applied to meet operating expenses–and 53% were interested in expanding business, pursuing new opportunities, or acquiring business assets.

For those with companies that have meaningful expenses, it’s a good idea to begin building business credit as soon as possible.

Another reason you may want to build business credit is for the ability to avoid staking your personal finances on the success of your company. “If you have significant personal assets, you want to insulate them from your business,” adds Karlene Barry. “If the business were to go belly up, you’d want to try to create the perception that it’s a separate entity.”