TABLE OF CONTENTS
- What Is a Paydex Score?
- How Does a Paydex Score Work?
- How Is a Dun and Bradstreet score Used?
- How Is a Paydex Score Calculated?
- Paydex Score Ranges
- How to Get a Paydex Score
- How to Check Your Paydex Score
- Paydex Score: Final Thoughts
A business’s Paydex Score, ranging from one to 100, relates to the business’s payment performance. Generated by Dun and Bradstreet (D&B), a higher Paydex Score indicates the business makes payments on time or early. Potential partners, investors, and lenders will assess your business’s dun and bradstreet score to determine the parameters of your future relationship. Read on to learn more about what the Paydex Score is, how it works, and how to maintain yours.
What Is a Paydex Score?
A Paydex Score is a numerical representation of a business’s past payment performance. It reflects the accuracy and timeliness with which said business paid its creditors, suppliers, and vendors. Issued by Dun and Bradstreet, Paydex Scores range from one to 100.
How Does a Paydex Score Work?
Dun and Bradstreet calculates Paydex Scores based on payment reporting from suppliers and vendors. Referred to as a “Trade Experience,” a party submits a business’s payment record to D&B. This payment record may be positive (an on-time or early payment) or negative (a late payment or unpaid debt).
Dun and Bradstreet utilizes at least three Trade Experiences from at least two reporting parties to determine a Paydex Score. At least two parties must report at least three payments before Dun and Bradstreet generates your business’s Paydex Score.
How Is a Dun and Bradstreet score Used?
Vendors and suppliers may take a business’s Paydex Score into consideration when determining its payment terms. They may offer a business with a high score net 60 payment terms instead of net 30 terms. The additional 30 days allotted for the business to pay its invoice improves its cash flow.
How Is a Paydex Score Calculated?
Dun & Bradstreet reviews payments made to vendors and suppliers, as well as the business’s payment terms. When calculating a business’s Paydex Score, D&B takes into consideration up to 875 Trade Experiences.
Factors impacting your Paydex Score
Unlike your business credit score, which is based on a variety of factors, only Trade Experiences impact your business’s Paydex Score.
Paydex Score Ranges
Ranging between one and 100, positive Trade Experiences result in a higher dun and bradstreet score. If your business’s Paydex Score is above 80, vendors, suppliers, and other interested parties likely consider your business low risk. Below examines the score range in more depth:
- 1 to 49: Considered a high-risk score, businesses with a score in this range made payments as late as 90 days or later.
- 50 to 79: Considered a medium-risk score, businesses with a score in this range made payments up to 30 days late.
- 80 to 100: Considered a low-risk score, businesses with a score in this range made payments on time or early.
What is a good Paydex Score?
It’s recommended businesses maintain a Paydex Score of at least 75. This number can be used as your baseline for a “good” Paydex Score. Meanwhile, a score of 80 to 100 is considered great. If you’d like to achieve a Paydex Score between 80 to 100, prioritize paying business expenses on time or early.
How to Get a Paydex Score
First, obtain a DUNS number for your business. A nine-digit code, DUNS numbers individually identify businesses within the United States. You can apply for a DUNS number for free on the Dun and Bradstreet website.
After acquiring your business’s DUNS number, Dun & Bradstreet monitors your Trade Experiences. If you regularly pay a vendor or supplier, inquire whether they report your payments to Dun & Bradstreet. If they do not, consider requesting they do so.
Interested in how to get a business credit score? Read our 10-step guide to establishing and building business credit.
How long does it take to get a Paydex Score?
In the three to six months after issuing your business’s DUNS number, Dun & Bradstreet could generate your business’s Paydex Score. However, this timeline is dependent on three Trade Experiences being reported by at least two parties. Depending on your business operations and whether any of your vendors or suppliers report your payments, D&B may not be able to generate a score for you for years. You may speed up this process by proactively requesting your vendors and suppliers report to Dun and Bradstreet if they do not already.
How to Check Your Paydex Score
You can review your business’s dun and bradstreet business credit score via your business’s creditor monitoring solution. If you don’t utilize a credit monitoring solution, the very company generating Paydex Scores—Dun and Bradstreet—offers D&B CreditorMonitor.
How to check another company’s Paydex Score
Whether another business is a competitor, potential partner, or future client, you may want to assess its Paydex Score.Anyone can purchase another business’s credit report on which its score will be listed.
How to increase your Paydex Score
Below are a handful of strategies to quickly improve your Score:
- Early payments: Not only should you make on-time payments, but you should aim to pay invoices ahead of the due date.
- Monitor credit reports: Be diligent about regularly monitoring your business’s credit history to confirm your payment performance is accurate.
- Confirm payment reporting: Confirm your vendors and suppliers report your payments to Dun & Bradstreet.
Paydex Score: Final Thoughts
Your business’s dun and bradstreet business credit score numerically communicates how quickly your business pays its invoices. A high score communicates your business’s phenomenal fiscal responsibility. Together, your business’s Paydex Score, credit score, and other related metrics indicate the financial strength of your business to lenders. If you improve your Paydex Score before applying for business financing options, you may secure growth capital with more favorable terms.
