The main credit score used in the business world is known as a Paydex score provided by Dun and Bradstreet.
This number assesses a business’s credit risk in the same way that a consumer’s credit score reflects an individual consumer’s credit risk.
Paydex is essentially the business equivalent of your personal credit score.
The exact definition by Dunn & Bradstreet, or D&B, is: The D&B PAYDEX® Score is D&B’s unique dollar-weighted numeric indicator of how well 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.
FICO consumer credit scores range from 350 to 850. Paydex scores range 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 higher is very good.
Here is a breakdown of how the Paydex Trading Score is calculated:
payment expectation
100 Wait for the payment to arrive before
90 Payments usually arrive before
payment discount period
80 Payment is fast
70 Payment arrives 14 days past deadlines
60 Payment arrives 21 days after deadlines
50 Payment arrives 30 days beyond the terms
40 Payment arrives 60 days past deadlines
30 Payment arrives 90 days past deadlines
20 Payment arrives 120 days beyond the terms
UN not available
If you own a business, your Paydex score is essential to establishing new credit and continuing to build credit limits that exceed $100,000.
It only takes 60 days to establish a positive Paydex score. To get started, you’ll first want to apply for 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’s creditworthiness.
Once your DUNS number is established, you’ll want to find a merchant that 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, a positive Paydex score will be established.
Then you’ll want to apply for more business credit and use it regularly. Be sure to pay all payments early to increase your scores to 80 or higher.
You can quickly and easily establish a positive Paydex credit score.
As you continue to pay your bills on time, your scores will continue to rise, qualifying you for credit in your business name.