Business Credit
The reporting agency for business credit is Dunn & Bradstreet (D & B ). This report ncludes any business loans, business credit cards, and any vendor you purchase supplies through that report to them. D & B use a formula to base the risk of your business’ ability to pay your creditors.
This scoring system is called the Paydex. This is a dollar weighted numerical indicator of how a business pays its bills during the course of the last year. Scores range from 1 – 100. The following is a breakdown of the Paydex scoring system:
- 100 – Anticipate (antic) – payments received before being invoiced.
- 90 – Discount (disc) – payments received within trade discount period.
- 80 – Prompt (prt) – payments are received within terms granted.
- 70 – 15 days beyond terms.
- 60 – 22 days beyond terms.
- 50 – 30 days beyond terms.
- 40 – 60 days beyond terms.
- 30 – 90 days beyond terms.
- 20 – 120 days beyond terms.
Your D & B report will show three scores; a true current score, a three month score, and a twelve month score.
It is important to work with vendors that report to D & B if you wish to build your business credit score. Most business lenders will require a Paydex score that exceeds a 64 and quite a few want to see the score above 70. A Paydex score of 75 is very close in value of credit to a personal credit score of 700.
As with your personal credit score, it is imperative to know what is on your D & B report. As with your personal credit report, if you have any questions or disputes, question it and have it resolved.
Dunn & Bradstreet: 800-234-3867 or customersvc@dnb.com