D&B is a business reporting agency. It writes reports on businesses for other businesses. The D&B rating is a credit appraisal of the company.
The standard D&B rating is composed of 2 parts.
The first is an estimate of the financial strength of the company based on their net worth.
The ratings for estimated financial strenth are as follows:
5A - $50,000,000+
4A - $10,000,000 to 49,999,999
3A - $1,000,000 to $9,999,999
2A - $750,000 to $999,999
1A - $500,000 to $649,999
BA - $300,000 to $499,999
BB - $200,000 to $299,999
CB - $125,000 to $199,999
CC - $75,000 to $124,999
DC - $50,000 to $74,999
DD - $35,000 to $49,999
EE - $20,000 to $34,999
FF - $10,000 to $19,999
GG - $5,000 to $9,999
HH - Less than $5,000
There is also a second part to the rating. It is a credit appraisal of the company. This information is based on a review of the financial position, history of the company, its operations, any legal activity, the company's banking relationship, it's debt handling and its relationship with other suppliers.
The information is gathered by interviews, records of payment performance, and examination of courthouse records for the publicly filed documents on suits, judgements, liens, bulk sales and discontinuancies.
A high credit appraisal is a 1
A good credit appraisal is a 2
A fair credit appraisal is a 3
and a limited credit appraisal is a 4
D&B can also issue an estimated appraisal and is also in 2 parts.
1R - estimated net worth is above $125,000
2R - estimated net worth is below $125,000 but greater than $50,000
With this rating there is not enough information to provide a standard rating. The credit appraisal is a 2 - Good a 3 - Fair or a 4 - Limited.
There are other companies that do not really fit into the business catagories as outlined by D&B and they can be rated by the number of employees. For example an ER1 rating is 1,000+ employees and an ER8 is only one employee.
There are 3 other ratings that might appear. "INV" means that there isn't any current information on file, and if you want to know about the company and investigation should be requested. A "FB" means that the company is a foreign branch. Usually the credit manager would then request an international report on the head office. A "--" means that there is not enough information available to classify the company.