Dun & Bradstreet's Paydex score is the main credit score used in the business world today.
This number assesses a business' lending risk much the same way as a consumer credit score reflects a consumer's individual credit risk. Paydex is essentially the business equivalent of your personal credit score even though it is calculated completely differently than the personal credit score utilized by the three personal credit reporting agencies.
How a firm paid its bills over the past year is the actual definition of the D&B Paydex credit score. D&B's unique dollar weighted numerical indicator of how a firm paid its bill over the past year, reported by various vendors to D&B, is the sole factor taken into account when calculating this score.
There are big 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 you can obtain. Most lenders and suppliers are looking for a score of 70 or higher. Having a score of 80 or above is very good.
Following is a Paydex score calculation breakdown:
Early payment before due date 100
Payments generally come within early payment discount period is a score of 90
Prompt Payment 80
Fourteen days beyond terms 70
Twenty One days beyond terms 60
Payment comes 30 days beyond terms is a score of 50
Payment after 60 days from due date 40
Ninety days beyond terms 30
Payment after 120 days from due date 20
Unavailable is noted as UN
For the business owner it it essential to have a good Paydex score to establish new credit and continue to build credit limits in excess of $100,000
To begin, business owners will first need to apply for a DUNS number with D&B and then it only takes sixty days to establish a positive Paydex credit score
Once your nine digit business identifying DUNS number is established you will next want to find a merchant who will extend you credit and then report that credit to Dun and Bradstreet.
A positive Paydex credit score is established once vendors report to D&B. To improve the score you will want to apply for more business credit and use it regularly. Be sure to make all payments early or discount to raise your score to 80 or higher.
You can easily and quickly establish a positive Paydex credit score. As you continue to pay your bills on a timely basis your scores will continue to rise giving you the ability to qualify for even more credit in your business name.
This number assesses a business' lending risk much the same way as a consumer credit score reflects a consumer's individual credit risk. Paydex is essentially the business equivalent of your personal credit score even though it is calculated completely differently than the personal credit score utilized by the three personal credit reporting agencies.
How a firm paid its bills over the past year is the actual definition of the D&B Paydex credit score. D&B's unique dollar weighted numerical indicator of how a firm paid its bill over the past year, reported by various vendors to D&B, is the sole factor taken into account when calculating this score.
There are big 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 you can obtain. Most lenders and suppliers are looking for a score of 70 or higher. Having a score of 80 or above is very good.
Following is a Paydex score calculation breakdown:
Early payment before due date 100
Payments generally come within early payment discount period is a score of 90
Prompt Payment 80
Fourteen days beyond terms 70
Twenty One days beyond terms 60
Payment comes 30 days beyond terms is a score of 50
Payment after 60 days from due date 40
Ninety days beyond terms 30
Payment after 120 days from due date 20
Unavailable is noted as UN
For the business owner it it essential to have a good Paydex score to establish new credit and continue to build credit limits in excess of $100,000
To begin, business owners will first need to apply for a DUNS number with D&B and then it only takes sixty days to establish a positive Paydex credit score
Once your nine digit business identifying DUNS number is established you will next want to find a merchant who will extend you credit and then report that credit to Dun and Bradstreet.
A positive Paydex credit score is established once vendors report to D&B. To improve the score you will want to apply for more business credit and use it regularly. Be sure to make all payments early or discount to raise your score to 80 or higher.
You can easily and quickly establish a positive Paydex credit score. As you continue to pay your bills on a timely basis your scores will continue to rise giving you the ability to qualify for even more credit in your business name.
About the Author:
Michael Sacks is an established authority with nearly 30 years experience in financial services and banking. Through his company's website you can receive a free e-book aboutestablishing business credit and obtaining funds for your business You will also learn how to avoid the 9 devastating finance mistakes business owners make.. This article, What Is The Dun & Bradstreet Paydex Business Credit Score is released under a creative commons attribution license.
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