Dun & Bradstreet Business Credit Scores
Dun & Bradstreet provides two Performance Credit Scores. D&B’s Performance Scores reflect a company’s past performance using only information within the D&B database. D&B’s 2 core Performance Scores are Paydex Score and D&B Rating.
The Paydex Score- Indicates how a company has paid its bills over the last 24 months. The D&B Rating- Indicates a company’s net worth range based on company financial statements, as well as a company’s overall condition.
The most popular credit score used in the business world is known as a Paydex score, provided by Dun and Bradstreet. From D&B… “The D&B PAYDEX® Score is D&B’s unique dollar-weighted numerical indicator of how a firm paid its bills over the past year, based on trade experiences reported to D&B by various vendors”.
“Dollar-weighted” means that D&B gives more “weight” to accounts with higher limits than ones with lower limits. Paydex gives more weight to the trade accounts that report higher amounts of credit extended and less weight to trade accounts that are reporting lower dollar amounts of credit.
“How a firm paid its bills over the past year”, means this score is based on past performance as the main driver. It’s simply based on how you paid your bills. The score ranges from 1-100. Higher scores are lower risk as they predict better payment performance.
Any score of 70 and higher D&B defines as a “good” score. An 80 score reflects Prompt Payment. A score of 70 reflects payments are paid within 15 Days of terms.
Scores 50 or lower represent payments being made 30 or more days past terms. A business can obtain a good business Paydex credit score by ensuring payments are made promptly to suppliers and vendors.
Here’s a breakdown of what your Paydex score literally means:
Expect payment may come early 100
Payments comes within early discount period 90
Payment is prompt 80
Payment comes 14 days beyond terms 70
Payment comes 21 days beyond terms 60
Payment comes 30 days beyond terms 50
Payment comes 60 days beyond terms 40
Payment comes 90 days beyond terms 30
Payment comes 120 days beyond terms 20
A business will need a PAYDEX score of 70-80 to obtain the most favorable financing. To obtain a PAYDEX score a business will need at least 3 trade accounts reporting to their file.
It can take 30-90 days for those trades to report and a score to be established. The business credit score itself is calculated by using as many as 875 payments.
True definition from D&B… “D&B Rating is a performance score based on a company’s net worth from its financial statements as well as an overall credit assessment using information in D&B’s database.”
The D&B Rating Indicates a company’s net worth range based on company financial statements, as well as a company’s overall financial condition. If a company’s financial statements are not provided, the score is based on company size, industry, or other related factors.
The D&B Rating is a performance score that’s based on a company’s net worth and overall credit assessment. The D&B Rating is broken into 3 distinct categories. Category is assigned based on the amount of information available on a company.