Your Business Score
What’s Your Paydex Score?
What’s Your Paydex Score?
What’s Your Paydex Score?
Dun & Bradstreet’s Paydex Credit Score is the most popular and well-known business credit score. It indicates how quickly a company has paid its bills. The true definition from D&B is…“ D&B Paydex is a dollar-weighted indicator of a business’s payment performance based on payment experiences in a company’s D&B’s file”.
Another important aspect of the Paydex system of which most business owners are not aware is a Paydex “weighted average” score. This score 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.
The Paydex score is “weighted”, meaning the bigger the bill, the more “weight” it can have on the D&B score. This score 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.
The Paydex 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.
Higher scores get new a business owner, better payment terms, lower insurance premiums, and higher credit limits. Due to these benefits, higher scores make it easier for a business to manage cash flow.
Be aware that banks DO pull the Paydex before lending; even though they won’t send you any disclosures letting you know they did pull your score, as they don’t have to. Having no Paydex score or limited credit will commonly lead to loan denial.
For example, if a lender pulls an incomplete report, they typically will decline the application but if a lender pulls a high Paydex score, the chances of being approved for credit lines from suppliers and lenders greatly increases. Suppliers and lenders can also receive updates of score changes.
It’s essential to know and understand this score to have the best success in building your business credit.
Give me a call today to learn more about how you can get credit and financing for your business.
(714) 357-4795
A Paydex score tip!
What’s Your Paydex Score?
What’s Your Paydex Score?
An important aspect of Dun & Bradstreet’s Paydex system is knows as a Paydex “weighted average” score
This score 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.
If a business owner is having any trouble “meeting all their credit payback obligations”, in other words if they know they are going to have to pay a bill late, it is important for that business to be sure to pay the “largest dollar” creditors first.
Those higher dollar accounts carry more overall weight within the Paydex score. So it’s essential the higher dollar accounts are paid timely to maximize the Paydex credit score.
This quick tip can help insure your Paydex score is as high as possible so you can be approved for more business credit for your company.
Give me a call today to learn more about how you can get credit and financing for your business.
Business Credit Benefits
Some Business Credit Errors That Could Cost You!
The Biggest Factor in Consumer Credit Scoring
Imagine having the ability to access $50,000, $100,000, even $250,000 for your business.
Now imagine doing this with NO personal credit check and NO personal guarantee.
Your success in business will be determined based on your business credit profile and score. With a good business credit profile you will have near unlimited borrowing power.
Without having a good business credit profile it will be a difficult path to success without having access to working capital and funding.
The Biggest Factor in Consumer Credit Scoring
Some Business Credit Errors That Could Cost You!
The Biggest Factor in Consumer Credit Scoring
That largest percentage of the credit score makeup of a consumer is from their payment history. Payment history accounts for 35% of the total consumer credit score. This means how consumers pay their bills accounts for more than one-third of their total score.
By law creditors have to wait 30 days to report a consumer late to the credit bureaus. After 30 days they will report the consumer late and their credit scores will go down. If they pay their bills on time their scores go up. If theyare late their scores will drop, and sometimes the scores can drop significantly.
Some Business Credit Errors That Could Cost You!
Some Business Credit Errors That Could Cost You!
Some Business Credit Errors That Could Cost You!
When building business credit, you will need to pay attention to more than just your payment history. How you use and interact with the credit system on several levels can either be a great benefit to your company, or come back to bite you if you aren't careful .
Don't be damaged by the bad credit of others. Suppliers and customers with bad credit can hurt your business. Not only do you need to be concerned about your own credit profile, but that of your suppliers too. A simple example of the importance of this is what happens with accounts receivable financing. Your rates for accounts receivable financing are based on your customer's credit rather than your own business's credit.
Dun & Bradstreet’s world reach
How Many Dun & Bradstreet Credit Scores do You Really Have?
Some Business Credit Errors That Could Cost You!
You may have heard of Dun & Bradstreet before. They are the biggest business credit reporting agency, by far, in the world.
What most don’t realize is that the United States is only a very small part of the overall records that D&B has. Most of their records of business owners are not from the US, not even from this continent.
Of their 200 million plus records on file, over 54 million were in Europe, while 33 million were from North America.
D&B even has a reach into Latin America where they have another 12 million records. Plus they have another 27 million records from Asia Pacific.
Africa is one area where D&B has the fewest records with less than 2 million records on file. Also in the Middle East D&B only has a little over 1 million records on file.
D&B truly has a massive presence worldwide. This is one of the ways they have over 200 million records on file, and are the largest source of business related data in the world.
So you can go anywhere wih your Business Credit.
Equifax Business Credit Scores
How Many Dun & Bradstreet Credit Scores do You Really Have?
How Many Dun & Bradstreet Credit Scores do You Really Have?
Equifax offers a few main business credit scores. The Credit Risk Score predicts the likelihood of a business incurring a 90 days severe delinquency or charge-off over the next 12 months. The Business Failure Score predicts the likelihood of a business failure through either formal or informal bankruptcy over the next 12 months.
The Payment Index provides a dollar weighted index of a business's current and past payment performance based on all payment experiences in the Equifax Commercial database. The Small Business Credit Risk Score for Financial Services predicts the likelihood of a business incurring greater than 90 days severe delinquency or charge-off on financial services accounts within a 12-month period.
This score is built using financial services and trade payment data, providing a higher degree of predictability. The score range is from 101 - 992 and it returns up to four reason codes, 0 indicates a bankruptcy
How Many Dun & Bradstreet Credit Scores do You Really Have?
How Many Dun & Bradstreet Credit Scores do You Really Have?
How Many Dun & Bradstreet Credit Scores do You Really Have?
Business credit scores are VITAL to your business. One of the reasons they are so important is that anyone can see them, and I mean ANYONE can see them.
Your customers, your competitors, every type of lender and credit issuer, and anyone else who wants to can access your business credit reports and your scores.
Now to the important question… Dun & Bradstreet is the largest and most important business credit reporting agency, so how many credit scores do they have on your business right now?
Please take your best guess below to see the answer:
A. 1 Dun & Bradstreet Business Credit Score
B. 3 Dun & Bradstreet Business Credit Scores
C. 5 Dun & Bradstreet Business Credit Scores
D. 7 Dun & Bradstreet Business Credit Scores
