The premier credit score used in the business world is called the Paydex score provided by Dun and Bradstreet.
This number assesses a business’s lending risk much like a consumer credit score reflects a consumer’s individual credit risk.
Paydex is essentially the business equivalent of your personal credit score.
The exact definition from Dunn & Bradstreet, or D&B is: The D&B PAYDEX® Score is D&B’s unique dollarweighted numerical indicator of how a firm paid its bills over the past year, based on trade experiences reported to D&B by various vendors.
There are several important differences from a business Paydex credit score and an individual FICO consumer credit score.
Consumer FICO credit scores range from 350-850. The Paydex Score ranges from 0-100 with 100 being the highest score a business can obtain.
Individual consumer credit scores are calculated based on a number of factors.
However the Paydex score is calculated based on only one single factor, whether a business makes prompt payments to its suppliers and creditors within the agreed upon terms of payment.
Most lenders and suppliers are looking for a Paydex score of 70 and higher. Having a score of 80 and above is considered very good.
Here is a breakdown of how the Paydex credit score is calculated:
100 Expect payment may come early
90 Payments generally come within early payment discount period
80 Payment is prompt
70 Payment comes 14 days beyond terms
60 Payment comes 21 days beyond terms
50 Payment comes 30 days beyond terms
40 Payment comes 60 days beyond terms
30 Payment comes 90 days beyond terms
20 Payment comes 120 days beyond terms
If you own a business, your Paydex score is essential in establishing new credit and continuing to build credit limits exceeding $100,000.
It only takes two months to establish a positive Paydex credit score. To begin you will first want to apply for a DUNS Number with Dun and Bradstreet, a nine digit business identifying number.
Once your DUNS number is established next you will want to find a company that will extend you credit and then report that credit to Dun and Bradstreet.
Once you have positive business credit report with Dun and Bradstreet you will have a positive Paydex score established.
Next you will want to apply for more business credit and use it regularly. Make sure you pay all payments early to raise your scores to 80 or higher.
With these steps you will easily and quickly establish a positive Paydex credit score.
As you continue to pay your bills on time your scores will continue to rise giving you the ability to qualify for credit in your business name.