Dun & Bradstreet's Paydex score is the main credit score used in the business world today.
While paydex is essentially the business equivalent of your personal credit score it is calculated completely differently than the credit score utilized by the three personal credit reporting agencies. It does, however, assess a business' lending risk much the same way as a consumer credit score reflects a consumer's individual credit risk.
Various vendors report to Dun and Bradstreet about how a firm paid its bills over the past year. This information as to how you pay your bills to suppliers and creditors within the agreed upon terms becomes a unique dollar weighted numerical indicator as is known as your Paydex Credit Score.
The Paydex score is calculated differently than the individual personal credit or FICO score. The Paydex score is from 0-100 while consumer credit scores from the three personal credit reporting agencies range from 350-850. Creditors and suppliers expect a Paydex score of at least 70 while you would try to make earlier payments to raise your score to 80-100.
Following is a Paydex score calculation breakdown:
Expect payment may come early is a score of 100
Payment within discount period 90
Prompt payment after discount period 80
Payment after 14 days from due date 70
Payment after 21 days from due date 60
Thirty days beyond terms 50
Payment comes 60 days beyond terms is a score of 40
Payment after 90 days from due date 30
One Hundred Twenty days beyond terms 20
Unavailable UN
For the business owner it it essential to have a good Paydex score to establish new credit and continue to build credit limits in excess of $100,000
To begin, business owners will first need to apply for a DUNS number with D&B and then it only takes sixty days to establish a positive Paydex credit score
Once your nine digit business identifying DUNS number is established you will next want to find a merchant who will extend you credit and then report that credit to Dun and Bradstreet.
A positive Paydex credit score is established once vendors report to D&B. To improve the score you will want to apply for more business credit and use it regularly. Be sure to make all payments early or discount to raise your score to 80 or higher.
Business owners will realize that they can easily and quickly establish a positive Paydex score. Vendors paid on a timely basis will continue to result in a rising Paydex score but also the ability to qualify for even more business credit without a personal guaranty
While paydex is essentially the business equivalent of your personal credit score it is calculated completely differently than the credit score utilized by the three personal credit reporting agencies. It does, however, assess a business' lending risk much the same way as a consumer credit score reflects a consumer's individual credit risk.
Various vendors report to Dun and Bradstreet about how a firm paid its bills over the past year. This information as to how you pay your bills to suppliers and creditors within the agreed upon terms becomes a unique dollar weighted numerical indicator as is known as your Paydex Credit Score.
The Paydex score is calculated differently than the individual personal credit or FICO score. The Paydex score is from 0-100 while consumer credit scores from the three personal credit reporting agencies range from 350-850. Creditors and suppliers expect a Paydex score of at least 70 while you would try to make earlier payments to raise your score to 80-100.
Following is a Paydex score calculation breakdown:
Expect payment may come early is a score of 100
Payment within discount period 90
Prompt payment after discount period 80
Payment after 14 days from due date 70
Payment after 21 days from due date 60
Thirty days beyond terms 50
Payment comes 60 days beyond terms is a score of 40
Payment after 90 days from due date 30
One Hundred Twenty days beyond terms 20
Unavailable UN
For the business owner it it essential to have a good Paydex score to establish new credit and continue to build credit limits in excess of $100,000
To begin, business owners will first need to apply for a DUNS number with D&B and then it only takes sixty days to establish a positive Paydex credit score
Once your nine digit business identifying DUNS number is established you will next want to find a merchant who will extend you credit and then report that credit to Dun and Bradstreet.
A positive Paydex credit score is established once vendors report to D&B. To improve the score you will want to apply for more business credit and use it regularly. Be sure to make all payments early or discount to raise your score to 80 or higher.
Business owners will realize that they can easily and quickly establish a positive Paydex score. Vendors paid on a timely basis will continue to result in a rising Paydex score but also the ability to qualify for even more business credit without a personal guaranty
About the Author:
Michael Sacks is a recognized expert with nearly 30 years experience in financial services and banking. Through his company's website you can receive a free e-book aboutestablishing business credit and getting funds for your business You will also learn how to avoid the 9 crucial finance mistakes business owners make.
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