This number assess a business’s lending risk much the same as a consumer credit score re ects 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 dollar-weighted numerical indicator of how a company paid its bills over the past year, based on trade experiences reported to D&B by various vendors.
There are many BIG differences in 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.
Individual credit scores are calculated based on a number of factors.
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 score of 70 and higher. Having a score of 80 and above is very good.
Here is a breakdown of how the Paydex credit score is calculated:
- Payment Expectation
- Expect payment may come early 100
- Payments generally come within 90
early payment discount period
- Payment is prompt 80
- Payment comes 14 days beyond terms 70
- Payment comes 21 days beyond terms 0
- 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
- Unavailable UN
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 60 days to establish a positive Paydex credit score. To start you should apply for your DUNS Number, a nine digit business identifying number, with Dun and Bradstreet.
Once your DUNS number is established you should find a merchant who will extend you credit and report that credit to Dun and Bradstreet.
Once you have positive business credit reporting to Dun and Bradstreet you’ll have a positive Paydex score established.
You will want to then apply for more business credit and use it regularly. Make sure you pay all payments back early to raise your scores to 80 or higher.
You can easily and quickly establish a positive Paydex credit score.
As you continue to pay your bills timely your scores will continue to increase, giving you the ability to qualify for credit in your business name.
About the Author
Aazim is the CEO of L.E.A.F Credit Solutions a national credit consulting company
At L.EA.F Credit Solutions Aazim specializes in helping people build, fix, and improve their personal credit in addition to teaching business owners how to establish strong credit scores for their business and leverage the credit of their business to get an abundance of cash and credit that’s not linked to their social security number.
Contact Aazim for more information on how he can help you or anyone you know establish excellent personal credit or build excellent business credit that’s not attached to your personal credit so you can get cash and credit.
Schedule a time to talk, appointments are limited to calendar availability.
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- 50k guarantee to every business owner
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