Dun & Bradstreet’s (D&B) PAYDEX is one of the more popular business credit scores among vendors and commercial lenders. Having a score of 80 or higher shows them your business pays its debts on time, if not early, on average.
Here’s a step-by-step guide explaining how to get an 80 PAYDEX score so you can more easily secure financing for your business.
1. Look for Creditors That Report to Dun & Bradstreet
Consumer credit bureaus compile your credit history into a credit report, but they let companies like FICO and VantageScore handle your credit score.
In contrast, the commercial credit bureaus play both roles, gathering business credit data and issuing business credit scores.
Since they’re effectively competitors, the business credit bureaus don’t share their scores with each other.
You can only get a copy of a business credit score from the business credit bureau that created it, and your score is only ever calculated using that agency's data.
As mentioned previously, the PAYDEX is a D&B score, which is why the first step to getting an 80 PAYDEX Score is to identify credit issuers that report to D&B. Only accounts from those issuers will contribute to your PAYDEX Score.
If you’re a relatively new business owner, it’s often best to start by going after vendor tradelines, also known as trade credit accounts. They come from businesses that don't specialize in lending and typically grant you an extended payment term.
Vendor credit accounts are easier to qualify for without significant business credit history. In contrast, financial tradelines, which are credit accounts from lending institutions like banks or online lenders, usually require at least two years of business history and a good business credit score.
Furthermore, the PAYDEX score only takes into account payments from vendors and suppliers. So get more of those to boost your score. Dun & Bradstreet says that you need two tradelines with at least three credit experiences for a PAYDEX score to be generated for a business.
2. Open New Tradelines or Credit Accounts
Once you have a list of credit issuers that report to D&B, start applying for new tradelines. Just avoid taking on so much debt that it becomes a financial burden. To get an 80 PAYDEX score, you must be able to make each payment on time.
Though more affordable than a business loan, even vendor tradelines aren’t free. Though they generally don’t carry interest, you’ll still have to make regular purchases to build your payment history.
Try to open vendor tradelines with businesses that offer products or services you already need. That way, using your credit account will do more than just build your business credit.
Once you’ve established a positive payment history with three to six vendor tradelines, you can start thinking about opening financial tradelines.
Typically, are your best bet since those are easier to secure than business loans or revolving lines of credit.
You may be able to start securing financial tradelines even sooner if you have a good personal credit score and apply with your Social Security Number (SSN). However, that usually requires that you personally guarantee your company’s debts.
3. Make On-Time or Early Payments
Payment history is the most impactful scoring factor in most business and personal credit scores. However, it’s especially significant to the PAYDEX Score, which is just a dollar-weighted measure of when, on average, you pay your bills.
Here’s how it works:
| PAYDEX Score | Dollar-Weighted Average Payment Date |
| 100 | 30 days early |
| 90 | 20 days early |
| 80 | On the due date |
| 70 | 15 days late |
| 60 | 22 days late |
| 50 | 30 days late |
| 40 | 60 days late |
| 30 | 90 days late |
| 20 | 120 days late |
| 1-19 | More than 120 days late |
Because the PAYDEX uses a dollar-weighted average, monthly payments of higher amounts have a more significant impact on your score.
For example, making an early payment of $2,000 toward a business loan will help your score more than a prompt payment of $200 to your fleet card.
The easiest way to get an 80 PAYDEX Score is to make all your monthly payments on time. However, if you make a late payment, you can recover faster by making future payments as much as 30 days early.
4. Keep Your Credit Utilization Low
Your credit utilization is the ratio of your outstanding debt to your credit limit. For example, if your business credit card has a $10,000 balance and a $25,000 credit limit, you have a 40% credit utilization rate on that account.
While credit utilization doesn’t directly impact your PAYDEX Score like your personal FICO Score, it’s still a good practice to keep yours relatively low. There are other business credit scores that do reward low credit utilization. High credit utilization is a red flag to lenders for a reason - it tends to correlate with financial distress.
After all, the higher your credit utilization on a revolving credit account like a credit card, the harder it is to pay back what you owe.
Additionally, if you carry a balance from one period to the next, you’ll incur significant interest costs. That can snowball quickly, especially when you’re juggling multiple accounts.
If you’re more interested in building business credit than financing your purchases, the safest approach is to keep your debt balances below your cash reserves.
That way, you can always afford to make your monthly payments, even if you start having cash flow issues.
Remember, your PAYDEX Score is all about the timeliness of your payments, so you can’t afford to overextend yourself. Paying late or defaulting on an account could set your progress back significantly.
5. Don’t Mix Personal and Business Credit
Your business credit is technically separate from your personal credit, but it’s surprisingly easy to muddy those waters. While that’s not necessarily the end of the world, it can often have negative consequences.
For example, some of the problems you may encounter when mixing your personal and business credit include:
- Messy financial records: If you use the same credit accounts for personal and business activities, it can become challenging to determine which transactions belong in which category. That can cause headaches when you need to do something like analyze your business’s financial performance or file your tax returns.
- Personal liability for business debts: When you open a business tradeline with your SSN and consumer credit score, you often give the lender the right to pursue your personal assets if you fail to make your payments and default.
- Risk to your personal credit scores: Business tradelines typically don’t appear in your personal credit reports if you keep them in good standing. However, many creditors report negative activity, especially if you sign a personal guarantee.
To prevent issues like these, keep your personal and business credit as separate as possible. Avoid signing personal guarantees whenever possible and try to apply for vendor and financial tradelines in your company’s name, not your own.
Keeping your personal and business credit separate isn’t strictly necessary to get a good PAYDEX Score, but it’s still highly beneficial.
6. Dispute Any Inaccurate Information
Errors in your business credit report aren’t as rare as you might think, and they can have a direct impact on your PAYDEX Score. Even a single incorrectly reported payment date could bring down your average timeliness significantly.
Fortunately, while the protections in the Fair Credit Reporting Act (FCRA) generally extend to consumers and not businesses, you can still dispute inaccurate information in your business credit reports. It’s just not quite as streamlined a process.
Here’s how you can fix the information in your D&B business credit report:
- Visit D&B DUNS Manager: Before you can update your D&B credit report, you need to find your company in its system, the DUNS Manager. Search using your business’s name and address. If you see your company in the search results, move on to the next step. If not, request a new DUNS Number to start a new credit report with D&B.
- Verify your identity and business association: Before you can update your business’s information, you have to prove your identity and show that you’re an owner, director, or officer of the company in question.
- Request updates to your company’s information: Once D&B has accepted your identity and business association, you should be able to request updates to your company’s identifying information, upload financial statements, and dispute any "payment experience" that appears in your business credit report.
In addition to using the free DUNS Manager portal, you can purchase D&B’s CreditBuilder service for $149 per month. Its benefits include the ability to manually submit up to 12 trade references to your D&B report.
Both of these options have the potential to help you fix errors in your credit report, but there’s no guarantee that D&B will agree with or accept your update requests.
Tips for New Businesses
If you’re a new business owner, here are some additional tips to keep in mind as you start building business credit for the first time.
Understand and Apply for a DUNS Number and EIN
If you want your business to qualify for bank financing on its own someday, you must establish it as a separate entity. A DUNS Number and Employer Identification Number (EIN) are both essential to that process.
A DUNS Number is a nine-digit number D&B uses to track your business in its system. D&B may assign one automatically if a vendor or lender requests information about your company, but if not, you must request one to start your D&B business report.
Similarly, an EIN is a nine-digit number that the Internal Revenue Service (IRS) uses to identify your company for tax purposes. It’s like an SSN for your business, and you can use it to apply for business credit in your company’s name.
Fortunately, you can request a DUNS Number and EIN for free online:
In both cases, you’ll need to provide identifying information about your business, such as its legal name, address, and structure. It can take up to 30 business days to get your DUNS Number, but you should see your EIN immediately after completing the process.
Monitor Your Business Credit Scores
Unlike consumers, the FCRA doesn’t grant businesses the right to access their business credit scores for free. As a result, you typically have to pay to get a copy of your PAYDEX Score.
That said, it’s still well worth doing to make sure your progress aligns with your expectations. If you see your PAYDEX drop for no apparent reason, you may have missed something, or there could be an error in your D&B credit report.
You can access your PAYDEX Score directly from D&B, but it’s relatively expensive. D&B requires you to purchase one of its subscriptions, the cheapest of which costs $49 per month. Of course, it comes with additional benefits, including other business scores.
However, if you’re only interested in your PAYDEX, the cheapest option is BusinessCreditReports.com, which offers a copy of the score a la carte for $5.95.
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