The main credit score used in the business world is known as the Paydex score provided by Dun and Bradstreet.
This number assesses the credit risk of a business in the same way that a consumer credit score reflects the individual credit risk of a consumer.
Paydex is essentially the business equivalent of your personal credit score.
The exact Dunn & Bradstreet, or D&B definition is: The D&B PAYDEX® Score is D & B’s unique dollar-weighted numerical indicator of how a business paid its invoices over the past year, based on business experiences reported to D&B by various vendors.
There are many BIG differences between a business Paydex score and an individual consumer FICO score.
Consumer FICO credit scores range from 350 to 850. The Paydex score ranges from 0 to 100, with 100 being the highest score you can get.
Individual credit scores are calculated based on a number of factors.
The Paydex score is calculated based on a single factor; if a company makes timely payments to its suppliers and creditors within the agreed payment terms.
Most lenders and providers look for a score of 70 or higher. Having a score of 80 or more is very good.
Here’s a breakdown of how the Paydex Business Score is calculated:
Expectation of payment
100 Wait for payment to arrive earlier
90 Payments are generally made before
payment discount period
80 Payment is on time
70 Payment arrives 14 days beyond terms
60 Payment arrives 21 days past deadlines
50 Payment arrives 30 days beyond terms
40 Payment arrives 60 days beyond terms
30 Payment arrives 90 days beyond terms
20 Payment arrives 120 days beyond terms
ONE not available
If you are a business owner, your Paydex score is essential in establishing new credit and continuing to create credit limits that exceed $ 100,000.
It only takes 60 days to establish a positive Paydex score. To get started, you will first want to request a
DUNS number, a nine-digit business identification number, with Dun and Bradstreet.
The DUNS number helps potential customers, lenders, and vendors assess your business creditworthiness.
Once your DUNS number has been established, the next thing you want to find is a merchant who will extend credit to you and then report that credit to Dun and Bradstreet.
Once you have a positive business credit report for Dun and Bradstreet, you will have an established positive Paydex score.
Then you’ll want to apply for more business credit and use it regularly. Make sure to return all payments early to raise your scores to 80 or higher.
You can quickly and easily establish a positive credit score from Paydex.
As you continue to pay your bills on time, your scores will continue to increase, allowing you to qualify for credit on behalf of your business.